CHAPTER 1

INTRODUCTION

Background of the Study

Healthy food means access for everyone to a diverse selection of

nutritious foods that are sustainably grown, harvested, and minimally processed

close to home (Senogles, 2019). It is a daily partner in everyday life, taking care

of us as we take care of it (Loew, 2019).

Less healthy habits have a direct effect on our overall health (Bijlefeld and

Zoumbaris, 2001). “For more than a decade, heart disease and cancer have

claimed the first and second spots respectively as the leading causes of death in

America as reviewed by Deborah Weatherspoon,PhD,RN,CRNA (Holland,

2018).”

Healthy living involves implementing health-enhancing behaviors or living

in healthy ways (Health Canada, 2008). Living in healthy ways involves making

positive choices about personal health, such as engaging in healthy eating,

choosing not to smoke, being physically active, and building a circle of social

contacts (Public Health Agency of Canada, 2008).

Healthy eating as one of the essential key to a healthy living can vary from

person to person, depending on existing health conditions and individual needs.

For example, individuals with diabetes may need to watch the amount of
 2

carbohydrates they eat and those with high blood cholesterol may take into

account the amount and type of fat in their foods (Lorig et al., 2006).

Different people discern healthy food in their own perception. However,

healthy food is a normal diet required for human nutrition. Moderation is the key

in a healthy diet. It can be done by feeding the body a balance of fats,

carbohydrates, proteins, and other essential nourishments in order to function

correctly.

Food ingredients is also a factor that people consider in healthy eating.

Fresher produce means better and more nutritious because fruits and vegetables

lose their optimal nutritional value as soon as they are picked; thus, the longer

the food sits the more it decreases in nutritional value. Healthy food products

have been growing rapidly in recent years which caused increase in the trend on

the demand for fresh produce that spurred by celebrity chefs, farmers’ markets,

Buy Fresh, Buy Local campaigns, and other initiatives (Bishop, 2018).

Meanwhile, in Bontoc, Mountain Province, less healthy habits were proven

for the large number of obese people in Bontoc. This is according to Dr.

Penelope Domogo, an Igorot doctor who was once assigned to the Bontoc Rural

Health Unit. Dr. Domogo also emphasized that the obvious and proven risks of

being obese are diabetes, hypertension and heart disease. Additionally, it turned

out that heart disease is the leading cause of deaths in Bontoc as reported by the

Department of Health. Witnessing such situation, Dr. Domogo saw the need for a

healthy lifestyle of the people not only in Bontoc but for the whole Mountain
 3

Province as she convinced the late Governor Mayaen to organize the Provincial

Coalition on Health Lifestyle (PCHL). With her initiative as the president of the

Episcopal Church in the Philippines Health Enhancers and Advocates for the

Lord (ECP HEAL), she lobbied Synod (the highest decision-making body of the

ECP) for the designation of last Sunday of July as Health Sunday. Some

activities are priests giving sermon on health, blood pressure check – up and

potluck of healthy indigenous food. A lot of people claim to have been helped

because of her advocacy. She firmly stands by her advocacy that reclaiming the

healthy indigenous lifestyle is the major path for development. With her daughter

Gawani, Dr. Domogo opened a vegan restaurant in Sagada which promotes

healthy living.

In response to the need for healthy food products in the municipality of

Bontoc as well as promoting healthy lifestyle, Viability of Establishing a Healthy

Restaurant in Poblacion, Bontoc Mountain Province is undertaken to determine if

it is feasible to open a healthy restaurant in Poblacion, Bontoc, Mountain

Province to better serve the mass that needs healthier and more socially

responsible consumption. The healthy restaurant will be a health advocate

restaurant offering healthy foods that gives access for everyone looking for a

diverse selection of nutritious foods that are sustainably grown, harvested, and

minimally processed close to home

The study can be a learning paradigm that can enhance the knowledge

and entrepreneurial skills of the readers. It aims to help them improve their

academic competence, develop their employability skills and implement their

 4

career plan and participate in a career pathway in preparation for further

education or careers in the food services sector.

Conceptual Framework

The study is anchored on a quotation by Virgil, “The greatest wealth is

health.” Health is the foundation for other Wealth – Health and wealth are related

in many ways. But one fact that stands out amongst all, is that health itself

promotes wealth. A healthy person will be more active, intelligent and efficient,

this directly affects his ability to earn more and this money can be further utilized

in creating more wealth. Participants perceived health as the ability to work and

support their families while ill-health created social and economic vulnerability.

Therefore, establishing the said restaurant will help citizens to start eating

healthy foods that will make them healthier to become productive in everyday

living.

To pursue the objectives of the study, the Input-Process-Output (IPO) was

used. The paradigm describes the coverage and direction of the study. It

included variables used in the study as shown in Figure 1 next page.

The input variable comprises the data on the establishment of a healthy

restaurant in Poblacion, Bontoc, Mountain Province in terms of Marketing Aspect,

Technical Aspect, Management Aspect, Socio-economic Aspect, Financial

Aspect, Accounting Aspect and Factors Affecting its Viability. The process

variable contains the data gathering tools or methods to process the data into

information such as interviews, survey questionnaires, projections, and analysis.

 5

The output will be a research on the viability of a healthy restaurant in Poblacion,

Bontoc, Mountain Province.

INPUTS

 Data on the
establishment of a
Healthy Restaurant
in Poblacion, PROCESS
Bontoc, Moutain OUTPUT
Province in terms
of:
Survey
 Marketing Aspect Questionnaire
Research on the
 Technical/ Informal viability of establishing
Interviews a Healthy Restaurant
Production in Poblacion, Bontoc,
Aspect Projections Mountain Province
 Management Analysis
Aspect

 Socio-Economic
Aspect

 Accounting Aspect

 Financial Aspect

 Factors affecting
the viability of
establishing a
Healthy Restaurant
in Poblacion,
Bontoc, Mountain

Figure 1.1: Paradigm of the Study

 6

Statement of the Problem

The study attempts to seek the viability of establishing a healthy

restaurant in Poblacion, Bontoc, Mountain Province specifically answering the

following questions:

1. What is the viability of establishing a healthy restaurant in Poblacion,

Bontoc, Mountain Province in terms of:

a. Marketing Aspect

b. Technical/Production Aspect

c. Management Aspect

d. Socio-Economic Aspect

e. Accounting Aspect

f. Financial Aspect

2. What are the factors affecting the viability of establishing a healthy

restaurant in Poblacion, Bontoc, Mountain Province?

 7

CHAPTER 2

DESIGN AND METHODOLOGY

The study used descriptive method of research that is wholly quantitative

in nature to meet its objectives through the use of a survey questionnaire as the

primary tool in gathering data. Actual populations of the target market were

gathered in the appropriate offices and premises. Further, interviews and internet

browsing were also used to helped in gathering other information needed. For

the supplementary data, related researches and published materials such as

articles, journals, researches and other materials written by experts or persons

that are well-versed regarding Healthy Restaurant were used.

Locale and Population

The main focus of the study is the viability of establishing a healthy

restaurant in Bontoc, Mountain Province. Specifically, the study was conducted in

the four central barangays of Bontoc namely: Barangay Bontoc Ili, Barangay

Caluttit, Barangay Poblacion, and Barangay Samoki. It focuses only on the

employed individuals, senior citizens and college students of the said barangays.

College students, regular employees and senior citizens were chosen as

the target market because they are mostly prone to diseases and immune

deficiency especially the regular employed individuals who sit on their office eight

hours or more in a working day. The table that follows presents the actual

population of the four central barangays in Bontoc.

 8

Table 2.1. Actual Population of the Four Central Barangays of Bontoc-2018

Barangay 2018 Percentage Respondent
Bontoc Ili 4,915 37% 144
Caluttit 2,136 16% 63
Poblacion 3,203 24% 94
Samoki 2,958 22% 87
Total 13,212 100% 388
Source: Municipal Planning and Development Office, Local Government Unit-Bontoc

Sampling through Slovin’s Formula with a 5% level of confidence as a

margin of error was used to identify the number of respondents. The computation

was presented as follows:

N
n=
1 + Ne2
13,212
= (1 + 13,212) (0.05)2
= 388 respondents

where: n – sample size

N – total population

e – margin of error

Based on the computation above, 388 is the sample size representing the

whole population for accurate information to be used in drawing conclusions. The

388 respondents were allocated to the four barangays based on their total

population. The questionnaires were floated randomly. The table below shows

the allocation of the respondents.

 9

Figure 2.1. Map of Bontoc

Data Gathering Tool

Data was gathered using random sampling by means of a survey

questionnaire. The survey questionnaires were constructed by the researchers. It

contains the questions asked to the respondents that were needed in formulating

an analysis. (Please see Appendix B for the Sample Questionnaire). Some of the

data in the questionnaire was based on the data gathered from Health 101

Restoreant and its manager, Mr. Elmer Makalingay. The internet was also utilized

in gathering data. Interview was secondarily used for verification and additional

data as necessary.
 10

Data Gathering Procedures

The research protocols were complied with before conducting the data

gathering phase. First, a proper notice of request letter was given to the identified

institutions or agencies involved. After giving the request letter to the concerned

institutions and agencies, the researchers waited for their approval. When

approval was confirmed, survey and interviews followed immediately. For the

appointments that were made, notice was given and the respondents were

appropriately informed beforehand. The questionnaires were then floated and

retrieved from the respondents. For the medium of communication, English,

Filipino and Local Dialects were used for a better flow of communication. The

researchers have also visited the Health 101 Restoreant and did an actual

observation on how it operates to gather more data.

Treatment of Data

The study was fully quantitative in nature. The data gathered were

properly tallied and summarized. The summarized result was then analyzed and

interpreted.
 11

CHAPTER 3

RESULTS AND DISCUSSION

Viability of Establishing a Healthy Restaurant in Poblacion, Bontoc,

Mountain Province

A. Marketing Aspect

Marketing has a great impact on the success of the business because it

builds a strong customer relationship in order to gain trust and loyalty. It involves

giving the right goods and services or ideas to the right people at the right place,

time, and price. Also, using the right strategies and utilizing the appropriate

people to provide satisfying customer service.

Marketing aspects are important as they need to drive sales by creating

awareness and bringing in customer acquisition and penetration in market

segments. It shows and discusses the study and results of the demand and

supply in the market. It also contains the marketing strategies and plans for

entering and competing in the market.

The products that the proposed business will serve to the customers are

combination meals and budget meals. Various kinds of beverages will also be

offered which will be refreshing and is fitting to drink with nourishing quality that

replenishes and energizes the body especially when tired. Beverages will be

made up of real fruits with no additives included. Wine will also be served as
 12

appetizers. In addition, egg pie will be served as dessert. Budget meals will also

be offered which are more affordable than combination meals.

The combination meals which will be offered are: Kidney Bean Salad,

Mushroom Omelet, Beefy Mushroom, Vege Meat Sisig, Vege Meat Curry, and

Caesar Salad. There are two budget meals that will be offered: Vege Meat and

Chicken Breast. The beverages that will be offered are: Pure Carrot Juice, Pure

Cucumber Juice, Carrot Apple Juice, Carrot Apple Cucumber, Cucumber Celery

Juice, Lemon Grass Iced Tea, Turmeric Tea, Arabica Coffee (Iced/Hot) and,

Service Water (Iced/Hot). (Please see Appendix B for the Sample Pictures).

There are a lot of products that the proposed business will be offering,

however these will be useless without demand. Demand is a strong need for

something like goods that buyers are willing to purchase at a given price. It is the

means in determining the profitability of a product or service. Demand

determinants are: price, income of customers, prices of related good,

preferences, and the quality of the products/service. These determinants imply

that: if the prices of goods are high, the demand decreases; if the incomes of

customers are low, their purchasing power also decrease; if the prices of related

goods are low, demand of the primary products will decrease; if the customer

does not prefer the product, the demand will decrease and lastly; if the product

has low quality, the demand for that product becomes low.

Supply is the amount of product/service available in the market for sale at

a specified price at a given point in time. Factors affecting supply are: price, cost
 13

of productions, and price of related goods. These factors imply that: if the price of

goods are high, the supply decreases; if the cost of production of goods are high,

the supply decreases and; if the price of related goods are high, supply of the

primary products will increase.

The table below presents the computed demand, supplied and free market

of the proposed business:

Table 3.1. Total Projected Demand Supplied Free market

Demand, population
Supplied
and Free
MarketXY
ear
99% 83% 16%
2020 13,344 13,211 11,076 2,135
2021 13,411 13,277 11,131 2,146
2022 13,478 13,343 11,187 2,156
2023 13,546 13,411 11,243 2,167
2024 13,613 13,477 11,299 2,178

The projected population above was computed based on the actual

populations from the year 2014 until 2018 through the use of the moving average

method (Please refer to Appendix F for the detailed computations). The projected

demand was computed by multiplying the projected population from 2020 to

2024 by 99% which is the percentage of those who are willing to avail the healthy

food products to be offered by the proposed business as presented on Table 3.1

above (Please refer to Appendix G for the results of the survey). The projected

supply was also computed by multiplying the projected population from 2020 to

2024 by 83% while the free market was computed by subtracting the supplied

from the demand resulting to a difference of 16% which was the free market. This
 14

shows that out of the 99% demand, 83% was already supplied while the

remaining 16% was not yet supplied (Please refer to Appendix G for the results

of the survey). Based on the result of the survey, there is a free market of more

than 2000 persons per year, however, the proposed business can only

accommodate as many as 120 to 146 persons from 2020 to 2024. Thus, a free

market of more than 2000 persons per year can be inferred to be relatively

favorable enough especially to a place where economy has been established

(Please refer to appendix H for the detailed computations of the normal capacity).

Demand and supply analysis is very relevant to the proposed business

since it is the source of many useful insights for business decision making

(Barnawal,2018). It is a fundamental factor in shaping the character of the

marketplace. The supply analysis is a key consideration in determining the extent

of availability of goods and services in the market, however, availability is only

one- half of the equation. The other half is demand. A company may be able to

produce huge quantities of a product but if there is little or no demand, it will not

be favorable to the company (Hall, 2018) and firms unable to attract consumers

are soon forced out of the market (Barnawal,2018).

Aside from the supply and demand analysis, the projected sales are also a

very crucial indicator of the profitability of the proposed business. The table that

follows presents the consolidated projected sales of the proposed business from

2020 until 2024: (Please refer to appendix H for the detailed computations). The

table shows that the projected sale of the proposed business is increasing every

year. The increase is affected by the increase in the normal capacity of the
 15

business. It implies that as the increase in the normal capacity of the business

increases, the sales also increase. Another factor is the increase in demand, as

the demand increases, the sales increases. Although the increases are not that

high, the proposed business is seen to be still profitable

 16

Table 3.2. Consolidated Projected Sales (Inclusive of Vat)

 17

It is also very important for a business to know its advantages and

disadvantages for it can be improved and addressed. These advantages and

disadvantages can be improved and addressed through the Strengths,

Weaknesses, Opportunities and Threats (SWOT) analysis.

SWOT analysis is a framework used to evaluate a company’s competitive

position and to develop strategic planning. It assesses internal and external

factors, as well as current and future potential. SWOT is designed to facilitate a

realistic, fact based, data driven look at the strengths and weaknesses of an

organization, its initiatives or an industry. Using internal and external data, the

technique can guide businesses toward strategies more likely to be successful

and away from those in which they have been, or are likely to be, less

successful.

To be able to utilize its strengths and take advantage of its opportunities as

well as to address its weakness and threats, a business needs to develop

marketing strategies. As R. L. Adams said, without the right marketing strategies

to fuel your growth, churning a profit and staying afloat is virtually impossible.

A marketing strategy is a business’ overall game plan for reaching people

and turning them into customers of the product or service that the business

provides. Marketing strategy should be centered around the key concept that

customer satisfaction is the main goal. Satisfactions of your prospects determine

how well your marketing strategies are. The table that follows presents the

SWOT matrix of the proposed business:

 18

Table 3.3. SWOT Matrix

Strengths: Weaknesses:
1. Health benefits 1. High product cost

2. Excellent ambiance

3. Centralized business location

SO Strategies WO Strategies
Opportunities S1S2O1O2 W1O2

1. Changing lifestyle 1. Social media marketing 1. Effective pricing

2. Increasing strategy
population 2. Thoroughly choosing
demand suppliers to ensure that 2. Facility control
product ingredients are fresh procedure
and from Good Agricultural
Practices

Threats: ST Strategies WT Strategies

S2 S3 T1 W1T1T2
1. Using the proper amount of
ingredients and the proper 1. Providing quality
1. Competition length of time of cooking for products and
each product. services to match
2. Global warming with high product
2. Using designed wooden cost and to have
tables and chairs to competitive edge
accommodate customers
2. Establishing
3. Using led chandelier to relationships with
provide light and elegant style local farmers to
maintain the
4. availability of
supplies needed and
lessen product
costs.

The proposed business will offer quality products equipped with health

benefits. To be able to match it with the changing lifestyle and continuously

increasing population demand, the proposed business will promote its products

through social media networks. Its products will be advertised on Facebook,

Youtube and advertising sites to be able to attract customers. It will also make
 19

sure to choose its suppliers carefully to ensure that the ingredients they will

provide will be fresh and healthy and from Good Agricultural Practices. Good

Agricultural Practices (GAP) are the practices that addresses environmental,

economic and social sustainability for on-farm processes, and which result in

safe and quality food and non-food agricultural products. It is a set of

consolidated safety and quality standards for on-farm fruit and vegetable

production.

The high cost of capital is the weakness of the proposed business. To be

able to address such weakness while coping up with the increasing population

demand, effective pricing strategy and facility control procedures will be imposed.

For an effective pricing strategy, the proposed business will offer its products at

reasonable prices basing its mark-up on the actual product costs to ensure that

costs will be covered while earning. Facility control procedures will be

implemented such as installing surveillance camera within the vicinity which will

be turned on 24 hours a day and 7 days a week. This is to ensure the security of

inside and outside the establishment. All tools and equipment will be checked for

damages every day before the operating hours to check if there are any

damages.

The proposed business will be competitive despite of its high product costs

by providing quality products to match with the high product costs. Furthermore,

the proposed business will address competition through the health benefits of its

products and its excellent ambiance. To ensure that the health benefits of the

products will not be distorted, the proper amount of ingredients and proper length
 20

of time for cooking each product will be observed. The ambiance of the business

place will be enhanced by using led chandelier for excellent lightings and for

elegant style. The location of the proposed business is also accessible since it is

to be situated in the center of the town.

Global warming is also a threat to the proposed business since the

ingredients to be used are mostly agricultural products and the supply of

agricultural products will be affected. The rising prices of such agricultural

produce are also affected by such phenomenon. Global warming and high

product costs are beyond the control of the business however, it can reduce the

risks. To reduce such risks, the proposed business will establish relationships

with the local farmers to maintain the availability of supplies needed and lessen

product costs.

Another strategy which is very significant for the success of a business is

establishing its identity. The identity of a business can be revealed through its

business logo. It represents the main theme or concept of a business. Below is

the business logo of the proposed business:

 21

Figure 3.1. Business Logo

The proposed business will be named “Going Healthy”. The word “Going

Healthy” means that this is the right place where to eat if one wants to change his

lifestyle into a healthy one. The heart shape in the middle of the logo signifies

that the foods to be offered are health friendly. The wooden fork and spoon

represent the type of business which is a restaurant. The leaves at the bottom

also symbolize that the ingredients to be used are genuine. The white

background of the logo represents the cleanliness and simplicity of the place.

The green color simply denotes life because it has a great healing power. The

light blue color is used at both ends because it is associated with healing. The

grayish-white color of the oval shape portrays that the ingredients which will be

used are from Good Agricultural Practices (GAP). Finally, the oval shape

portrays security which means that being healthy leads to being free from

diseases.

Advertisements also are very essential in promoting a business as it is the

way to introduce the business to the public. The proposed business will use light

box, tarpaulins, signage and flyers for its promotion. The Light box will be

installed at the very front of the business place. It will be a means for the

proposed business to be identified in its very location. Tarpaulins will be placed

at the entrance of Bontoc from Baguio City as an advertisement for the proposed

business. Flyers will be distributed everywhere to advertise the business to the

public. Signage will be placed at entrance of Bontoc from Sadanga and Kalinga

to advertise the proposed business. A signage will also be placed at the circle
 22

beside the Bontoc New Commercial center. (Please refer to appendix I for the

sample designs of light box, tarpaulins, signage and flyers.)

It is also important that the costs of advertising materials will not exceed

its benefit. The costs of the advertising materials to be used by the proposed

business is presented by the table below:

Table 3.4. Advertising Costs

ITEM QUANTITY UNIT COST TOTAL COST

Flyers 250 pcs 10.00 2,500.00
Tarpaulin 2 500.00 1,000.00
Signage 1 4,500.00 4,500.00
Total 8,000.00

The table shows that the total initial advertising costs for the proposed

business is 8,000.00 which is a just amount considering that it will bring

unmeasurable benefits in promoting the business.

B. TECHNICAL ASPECT

Technical aspect deals with the effective tool for long term planning as far

as the facilities and operation is concerned. It helps to determine the supplies,

utilities and equipment to be acquired, as well as the location and layout of the

project. It also aims to discuss how and when the service is to be rendered, how

much will it cost to offer the service. Moreover, the technical aspect should most

essentially support the financial information of the business.

Accordingly, one of the most common causes of new business failure is

not having enough cash to meet expenses, especially in the first six to twelve

months of starting the business. And there are many costs to consider when
 23

starting a business and it is very important to calculate the on-going and one-time

costs (www.business.qld.gov.au). Also, planning the business budget or how

much money you may need will go a long way toward getting your company up

and running (Gretchen Schmid). In relation to this, costs of supplies, tools and

equipment to be purchased quarterly and annually and all start-up costs were

determined.

The business will be situated at Kedawen Building, Poblacion, Bontoc

Mountain Province. The street side is a very busy place where a great number of

people come and go. The business is strategically situated at the said location

because of its suitability for the targeted market. The said location is very much

accessible to students, employees, office workers, businessmen and for

everyone who passes by.

As to the planning of the business, the Gantt chart below shows the

program of activity in putting up the proposed business with the specific time in

each activity. Each activity has its own timeframe to achieve the target date of

operation.
 24

Table 3.5. Schedule of Activities

2019 2020
Jun
Activities Jan Feb Mar Apr May
e
July Aug Sep Oct Nov Dec Jan
Feasibility
 
study
Procurement
 
of Funds
Purchases of
Sup. &  
Equipment
Furnishing of
the Business  
Site
Hiring of
 
Employees
Business
 
Advertisement
Processing of
Legal
Documents
Start of
 
Operation

Before the proposed business starts, a series of activities will be

accomplished. First is the feasibility study. Feasibility study is an assessment of

the viability of the proposed business. The study was conducted on January until

June 2019. Knowing beforehand the possibility of business to be profitable is a

vital role in establishing a business. In conducting the research concerning the

feasibility of the proposed business, a total cost of P12, 000.00 was incurred. The

feasibility cost is for materials, data gathering expense and researcher’s snacks

and meals. (Please refer to Appendix J for the detailed breakdown of the cost

incurred.)

Second is the procurement of funds wherein the partners will contribute

funds to finance the business operation. The funds will be procured from June

until August of 2019.

 25

Third is the purchase of supplies and equipment. The purchase will be

done on September to be completed on October 2019. The proposed business

will purchase some of the supplies and equipment in Tiongsan, Baguio City while

all the rest will be purchased in Bontoc, Mountain Province. (Please refer to

Appendix J for the details of the purchases in Tiongsan, Baguio City.)

Fourth is the furnishing of the business site. The purchased equipment will

be all installed on October 2019. The floor plan shows where the furniture and

fixtures, equipment and other assets are to be placed. It shows that the proposed

business can accommodate fifty-six (56) customers at a time. (Please refer to

Appendix K for the floor plan of the proposed business.)

In furnishing the business site, the space for the business will be

maximized in a way that it can accommodate all the equipment purchased. The

space will also be subdivided into: reception area; kitchen area; dining area;

manager’s office; and storage room. (Please refer to Appendix K for the

designs).

The reception area is where the customers will order their meals and

beverages and at the same time pay their bills. The kitchen area is where the

ordered meals and beverages will be prepared. This area will be consisting of

kitchen equipment, utensils and others. It also includes the storage area for the

kitchen materials and supplies. The dining area is where the customers will enjoy

their meals and beverages. The manager’s office is the designated working place

for the manager. The storage area will serve as a storage room for the supplies
 26

needed. This area is where the kitchen inventories, supplies, commodities will be

stocked.

Fifth will be the hiring of employees and at the same time the

advertisement of the proposed business. Hiring employees is the staffing stage

where recruitment and selection of employees is done. Needed personnel will be

hired and oriented by the proposed business. As to the advertisement, the

proposed business will be introduced to the public through tarpaulins, flyers,

social media and word of mouth. The hiring of employees and advertisements

will both be completed on November and December 2019.

The last stage is the processing of all the legal documents. All the

documents will be prepared and processed on January 2020. In order for the

proposed business to operate legally, a total of P 7,710.00 will be incurred in

payment of all taxes and licenses required prior to business operation and

registration. (Please refer to Appendix L for the details).

After the processing of all legal documents needed, the business will

begin its operation on January 2020.

The table below presents the total costs of office equipment; office

supplies; kitchen tools and equipment; kitchen supplies; maintenance supplies;

other assets; and furniture and fixture to be acquired. For the first week of

operation, it will incur expenses from the purchase of initial inventories for the

production of meals and beverages (Please refer to Appendix L for the detailed

computations).
 27

Table 3.6. Cost of Purchases

Items Cost
Office Equipment P 81,300.00
Office Supplies 12,976.00
Kitchen Told and Equipment 335,234.00
Kitchen Supplies 30,680.00
Maintenance Supplies 23,340.00
Other Assets 40,600.00
Furniture and Fixtures 19,219.00
TOTAL P 543,349.00

Further, additional expenses will be incurred as the business will continue

its operation. Such expenses are utilities expense; repairs and maintenance

expense.

For the operation of the business, there are 13 electric powered

equipment/facilities that were necessary in the proposed restaurant. This

includes the computer, printer, Air con, Refrigerator, Blender, Rice Cooker and

others. A total of 1,675.95 kilowatt hour (kwt) consumption per month was

estimated with average energy rate of 10.147025 /kwt plus 5 peso fixed charge

per month as based from the rate provided by Mountain Province Electric

Cooperative (MOPRECO). (Please refer to Appendix M for the detailed

computations).

The table below shows the summarized annual electricity consumption of

the restaurant. The electricity consumption is increasing every year due to the

inflation rate. (Please refer to Appendix M for the detailed computation.)

 28

Table 3.7. Cost of Electricity

Year Amount
2020 182,259.71
2021 187,835.22
2022 193,468.67
2023 199,271.12
2024 205,247.65
The table below shows how the costs were allocated to the equipment-

computer, surveillance camera and air con. During the operation of the business,

equipment is expected to incur damages; thus, the business allotted amounts for

the cost of repairing and maintaining business facilities and equipment. The cost

of repairs and maintenance are based on reasonable estimates. The increase of

cost every year was a result of inflation.

Table 3.8. Repairs and Maintenance

The figure that follows shows the flow of activities within the restaurant. It will

start when a customer will enter the restaurant. The receptionist will ask the

customer’s orders and see if there are available tables for accommodation. If

there are no available tables, the customer will not be accommodated. If there

are available tables, the customer will be accommodated and the activity

continues. The receptionist will then receive the payment from the customer then

relay the orders to the kitchen personnel. The kitchen personnel will then prepare
 29

the orders and serve it to the customers. The activity ends when: the customer

will not order meals and beverages; or when the customer ordered meals and

beverages and his demands was satisfied by serving him his specific orders.
 30

Figure 3.2. Flow Chart of Activities

C. Management Aspect

Management is one of the important aspects in establishing a business.

It is the performance of conceiving and achieving desired results by means

of group effort consisting of utilizing human talents and resources.

Management aspect defines a clear and precise identification of functions,

responsibilities, qualifications and benefits to have coordination within the

organization and to achieve the company’s mission, vision, goals and objectives

for its continuity and success (Bejo, et. al ,2015). This aspect includes a study of

the offices and key personnel, basic consideration in forming the organization,

form of ownership and projected schedule. This aspect is the central idea of how

to make every action or decision to help achieve goals. Therefore,

management is considered as the force that runs an enterprise and is

responsible for the success or failure of the business.

As for the business formation, the proposed business will operate in the

form of a partnership consisting of five (5) members who shall then become co-

owners of the business and will share in the business profit and loss.

The business formation is a partnership because it contributes to the

viability of the business through the benefits that it could provide such as ease of

formation, capital availability, flexibility in decision making, and ease of

management (Valencia, et. al, 2015). It is relatively easy to form because the

partners can get together, decide on how much they will invest and on how they
 31

will divide their profits, thus, after that they can start a business. The business

can have an availability of capital because the partners can invest into the

business whether in cash or in equipments. It will also have a flexibility in

decision-making as there are more owners, new ideas will be brought out and

problems could be easily solved through proper business meetings. The

management of the business will also be easy because there are more persons

to run the business and be held accountable for the business undertaking

considering that a partnership is a mutual agency.

Further, the figure shows the vision, mission, goals and objectives of the

business. The importance of a vision, mission, goals and objectives in a business

is that it would help to create the cultural structure of the business and can

provide a strategic step and a general guideline on how to achieve the business

goals. Moreover, it describes an organizational plan which can be an inspirational

or motivational statement that is meant to drive employees. Further, it will clearly

demonstrate the organizational goals to stakeholders and the steps on achieving

its objectives.
 32

Figure 3.3. Vision, Mission, Goals and Objectives

The business sets its vision to be the best healthy restaurant in Bontoc,

Mountain Province; the business envisions to becoming one of the Organic

Restaurant in the Philippines. This sets the vision since the business wants to

promote healthy lifestyle and organic farming in the community. In order for the

business to achieve such, the business will provide a delicious yet healthy food

to customers and to guarantee a satisfactorily dining experience by ensuring a

consistent exceptional service. Furthermore, the business will ensure an

improving satisfying service to build a “suki” system for steady influx of

customers.

Further, organizational chart provides guidance to all employees by laying

out the official reporting relationships that govern the workflow of the company.

Without a formal organizational structure, employees may find it difficult to know

who they officially report to in different situations and it may become unclear

exactly who has the final responsibility. Organizational structure improves

operational efficiency by providing clarity to employees (Ingram, 2019).

In the figure below, the organizational chart of the business shows that the

manager is at the top because the manager will oversee the operation of the

business and see that all personnel follows the rules and regulations. If problem

shall occur in the operation of the business, personnel shall report them to the

manager. The second-in-line in the organizational chart is the cook and if

problems will occur in the kitchen, personnel shall report them to the cook. Third-

in-line will be the cashier and service crews. Under the service crew shall be the
 33

part-time service crew. The part-time bookkeeper shall report directly to the

manager.

Manager
Part-time
Bookkeeper
Cook

Service Crew Service Crew Cashier

1 2

Part-Time
Service Crew

Figure 3.4. Organizational Chart

Employee benefits, also known as perks or fringe benefits, are provided to

employees over and above salaries and wages. These employee benefits

include mandatory benefits, leave benefits, holiday pays, other benefits and

honorarium.

Mandatory benefits are benefits that the government mandates, or

requires, that employees receive from employers as a matter of law. These

 34

include SSS benefits, HDMF benefits and PhilHealth benefits. (Please refer to

Appendix N for the detailed computations).

SSS benefits are given to regular employees and the premiums shall be

shared among them with the business based on the revised SSS Contribution

schedule applicable for 2019 provided in the official website

(Http://www.sss.gov.ph). HDMF benefits shall be given to all regular personnel

wherein the business and the personnel shall contribute Php 100 based on the

minimum allowable contribution given in the Payroll Salary Compensation

Benefits under PD No. 442. PhilHealth benefits shall be given to all regular

personnel which will be shared among them with the business. The monthly

contribution shall be at the rate of 2.75% computed straight based on the monthly

basic salary, with a salary floor of P10,000 and a ceiling of P40,000 stated on the

PHILHEALTH circular no. 2017-0024

Leave Benefits are benefits allowed by the law and the agreement of the

business and the personnel. These are the days when employees may still be

paid despite their absence of work. Regular meal and break periods, sick leaves

and emergency leaves are included.

Regular meal and break periods are given to all personnel for satisfying

their necessities such as having a meal with a maximum of 60-minutes per day.

Break times will not be included in the 10-hour working day. Sick leaves will also

be given to all regular.

Sick leave will also be granted to all personnel with duration of 4-days

provided that such personnel will secure a proper document to support such
 35

claim and have paid at least 3-months contribution within the 12-month period

immediately before the semester of sickness or injury.

All personnel shall also be granted an emergency leave anytime with pay

provided, it would not exceed a 3-days period and can be allowed for a reason

that it involves a death or hospitalization of an immediate family and other

important events requiring the employee’s presence, if any. Employee leaves will

not be stackable and not convertible to cash.

Regular personnel shall be given a holiday pays mandated by DOLE when

working at a holiday period and will be given a premium of 100% of the daily rate

if it is on legal holidays. Premium of 30% of daily rate exclusive of COLA shall be

given if it is on a special holiday. Holiday premium was based on the handbook

on worker’s statutory monetary benefits as issued by DOLE. (Please refer to

Appendix N for the detailed computations).

Other benefits such as 13th month pay will be given to rank and file

employees which shall be equal to a monthly basic salary and will be given not

later than 24th of December based on the handbook on worker’s statutory

monetary benefits as issued by DOLE. Honorarium will also be given to the part-

time employees, if any, especially the bookkeeper which would be P1000 per

visit. (Please refer to Appendix N for the detailed computations).

Offering an employee benefits are important as it will show that the

business is not only investing on the personnel’s well-being but also their future,

besides, employees are the soldiers of the business which makes the business in

operation. Offering employee benefits will bring a loyalty or retain personnel and
 36

will also attract more talent or skilled-worker in a business as further verified a

survey entitled, “Views on the Value of Voluntary Workplace Benefits: Findings

from the 2015 Health and Voluntary Workplace Benefits Survey, by Paul

Fronstin, Ph.D., EBRI, and Ruth Helman, Greenwald & Associates” published at

the Employee Benefits Research Institute.

The table below shows the annual salaries and benefits to be offered by the

proposed business.

Table 3.9. Annual Salaries and Benefits

Year Salaries/ 13th HDMF PhilHealth SSS Holiday
Honorarium month Pay
pay
2020 814,187.50 47,320.00 6,000.00 10,163.28 30,240.00 17,581.00
2021 814,187.50 47,320.00 6,000.00 10,163.28 30,240.00 17,581.00
2022 814,187.50 47,320.00 6,000.00 10,163.28 30,240.00 17,581.00
2023 814,187.50 47,320.00 6,000.00 10,163.28 30,240.00 17,581.00
2024 814,187.50 47,320.00 6,000.00 10,163.28 30,240.00 17,581.00

Further, business policy defines the scope or spheres within which

decisions can be taken by subordinates in an organization. It permits the lower

level management to deal with the problems and issues without consulting top

level management every time for decisions.

Business policies are the guidelines developed by an organization to

govern its actions. They define the limits within which decisions must be made.

Business policy also deals with acquisition of resources with which organizational

goals can be achieved. Business policy is the study of the roles and

responsibilities of top-level management, the significant issues affecting

organizational success and the decisions affecting organization in long-run.

According to Kimberlee Leonard, business policies are important and affect

 37

everything from legal liabilities to employee satisfaction and a positive public

image. Policies make sure everyone is on the same page when it comes to

expectations of certain things and also create a positive work environment thus

making all personnel feel safe at work will makes them happy and more

productive.

Further, the recruitment, screening and hiring of employees was based on

the job description and qualifications set by the owner on each specific job. The

manager will be responsible for recruiting and hiring classified employees.

(Please refer to Appendix N for the job descriptions.)

The requirements that the applicant needed to submit are application

letter, resume with 2 copies of 2x2 I.D. picture (at least three months latest),

police clearance, barangay clearance, PSA birth certificate, applicable license/

certification and medical certificate.

Table 3.10. Recruitment Expense

Particulars Amount
Materials (Pens and Papers) 100.00
Snacks and Meals for the Interviewer 400.00
Total 500.00

Further, once employed, an employee may resign provided he/she shall

have a valid reason, and must submit a resignation letter at least one month in

advance prior to its effectivity. The advance submission of resignation is for the

management to have time to look for a replacement.

 38

Further, the grounds for termination of an employee are serious

misconduct or willful disobedience of lawful orders of his/her employer, gross and

habitual neglect by the employee of his/her duties, inhuman and unbearable

treat, fraud and willful breach by the employee of trust reposed in him by his

employer or duly authorized representative and a crime committed against the

person of his employer or any immediate member of his family or his duly

authorized representative based on PD No.442, Art. 282.

Further, personnel who takes an absence or always tardy at work not

providing a valid reason of consecutive or non-consecutive absences and

tardiness of work cumulative in a year will be subject to an appropriate

disciplinary action. The first offense, consisting of 5-days, shall be subjected to a

verbal warning. The second offense, consist of 8-days, shall be subjected to a

written warning with a suspension of 3 working days. Lastly, the third offense will

be subjected to termination.

Further, every personnel shall have a working hour of eight regular hours

and two-hour overtime (10) in a day from 9:00 am to 7:00 pm from Monday to

Friday and Sunday, except a part-time service crew as they will only be required

to work four (4) hours in a day. Saturdays will be a rest day. Part-time

Bookkeeper will only need to report every end of the week. A log book for time in

and time out will be provided to be the basis of the computation of compensation.
 39

Table 3.11. Reporting Time of Employees

Further, all personnel shall be also given a compensation, vacation

period of one day in a week and a uniform. The business will provide uniforms to

all personnel to distinguish them from customers. All personnel shall wear their

appropriate uniforms when on duty.

The uniforms of all personnel shall be in a dark-green collared shirt with a

name-tag paired with black pants. The cook shall wear an apron and a hairnet

The table below shows the uniform expenses. It shows the number of

employees the unit cost of their uniform and the total uniform expense incurred.

Table 3.12. Uniform Expenses

 40

Further, rules and regulations are policies applicable to employees and

also to the customers that they need to observe and apply. The figure below

shows the rules and regulations to be complied with by employees.

Figure 3.5. Rules and Regulations of the Business

D. SOCIO-ECONOMIC ASPECT

A business depends on the society for inputs like money, men and skills

and also for market where products have to be sold to customers. The business

depends on the society for existence, sustenance and encouragement. Being so

much dependent on society, a business also has a definite responsibility towards

different segments of the society. Though profit-making is one of the main

objectives of a business, it has to satisfy the government, community, the

environment, the employees and the costumers.

 41

As a part of the society, it is the responsibility of a business to pay its

taxes. Taxes collected by the government to businesses provide funds which are

used to create and support projects for the welfare of the people. In relation, the

business will pay its taxes due and will also pay the necessary fees required for

the business to operate. Furthermore, the business will support the government

by promoting the Healthy Lifestyle Program of the Department of Health since

the business will be offering healthy foods. The table below presents the taxes

that the proposed business will pay:

Table 3.13. Taxes

2020 2021 2020 2023 2024
Value Added
Tax 40,056.11 46,072.28 48,299.31 50,905.21 53,509.37
Income Tax 128,694.83 134,347.19 137,746.05 142,592.21 144,185.89
Total Taxes 168,750.93 180,419.47 186,045.35 193,497.42 197,695.25

The table above shows that the taxes of the proposed business are
increasing each year which means that the Government will benefit from it.
(Please see Appendix N for the detailed computations)
The proposed business depends on the community for survival as it is

where its resources come from. In return, the business will benefit the community

in terms of waste minimization since the business is more of biodegradable

wastes which are easily disposed and will not harm the community. These

Biodegradable wastes will be recycled through composting. It will also offer food

products which cater to the needs of the people in the community and contributes

to their healthy living. The business will also benefit the community in terms of

employment since jobs will be offered to those who are willing and are able to

work for the business. Furthermore, the business will help in patronizing the
 42

agricultural products of local organic farmers, if there are, by buying their

agricultural produce as the main ingredients for the healthy foods that the

business will offer.

The environment is also a significant factor which affects the success of a

business. Going Healthy being an environmental concerned business will be

helping the environment through waste management. Biodegradable wastes like

food scraps and fruit and vegetable peels will be segregated from non-

biodegradable wastes. While biodegradable wastes will be recycled through

composting; non-biodegradable will be disposed on the schedule of collection of

non-biodegradable waste as instructed by the LGU-Bontoc.

Moreover, employees are said to be the true assets of a business entity.

Even the best of technology or best of infrastructure would not be of much use if

employees do not perform to the mark and are not satisfied with their job. A

happy and satisfied employee does his job efficiently and effectively providing the

best quality service. As a response, the business will make sure that its

employees will receive fair wages for their services rendered. In addition to the

basic pay, overtime pay will be awarded to the employees together with SSS and

PhilHealth benefits. The business will also provide training and work educations

for its employees. The business shall look after the welfare of its employees to

continuously motivate them for better performances.

Consumer satisfaction is also very essential for the growth of a business.

To ensure customer satisfaction, Going Healthy will offer the best and quality
 43

products to satisfy the customer expectations regarding the products that the

business will offer.

E. ACCOUNTING ASPECT

Accounting as the language of business serves as a means of

communication. It communicates the results of business operations to various

parties directly and indirectly whose interests were on the economic status of

business organizations. It gives them insights regarding the true financial

standing of the business, as accountants interpret and communicate them

through financial reports. (Valencia and Roxas, 2014)

Accounting cycle or accounting process is a series of recurring accounting

activities from the beginning to the end of a given accounting period. It is based

on the basic assumption of periodicity or time period, which assumes that the life

of the enterprise is divided into several periods. (Valencia and Roxas, 2014)

This aspect shows the accounting cycle, chart of accounts, internal

controls, and narrative of the system. It provides guidance in the proper

recognition and treatment of every transaction.

The figure next page presents the accounting cycle flow chart of the

proposed business:
 44

Figure 3.6. The Accounting Cycle Flowchart

Accounting cycle has ten (10) steps, which starts from the (1) analyzation

of the various business transactions individually like determination of accounting

elements affected and their effects in the accounting equation. (2) Journalizing

the transactions analyzed above in the general journal. (3) Post or transfer the

debit and credit values from the general journal to the general ledger. (4)
 45

Preparing the trial balance which is to extract the account balance from the

ledger. (5) Determining the accounts to be adjusted, journalizing and posting the

adjustments. (6) Prepare the working papers which leads to the making of

preliminary financial statements in the worksheet. (7) Journalizing and posting of

the closing entries which are transferring of the nominal account balances to the

capital account. (8) Preparing the post-closing trial balance which comprise of the

real or permanents accounts. (9) Preparing the formal financial statements and

(10) Journalize the reversing entries at the start of the next accounting period.

(Valencia and Roxas, 2014)

Further, the accounting aspect contains the chart of accounts wherein the

number of accounts maintained by a specific enterprise is affected by the nature

of its operations, its volume of business, and the extent to which details are

needed for taxing authorities, managerial decisions, and credit purposes. The

accounts are numbered to permit indexing and also for use as posting references

(Fess, et al.,). It includes the assets, liabilities, equity, revenue and expenses.

(Please refer to Appendix O for the chart of accounts).

Accounting aspect contains the books of accounts that were used by the

proposed business in recording their transactions. It comprised the cash

payments journal that contains all transactions regarding cash payments during a

given period. The cash receipts journal that contains all transactions regarding

cash receipts during a given period. Another is the purchases on account journal

which is used as a book of original entry to record several purchases on account.

The general journal keeps records of miscellaneous transactions that cannot be

 46

recorded in the special journals. And last is the general ledger where the

transactions journalized in the general journal are posted which also includes the

adjusting and closing entries. (Valencia and Roxas,2014)

Furthermore, accounting aspect addresses internal controls. Internal

control means all the policies and procedures adopted by the management to

assist in achieving the proposed business objective of ensuring the orderly and

efficient conduct of its business, including adhering to business policies,

safeguarding assets, prevention and detection of fraud and error, accuracy and

completeness of accounting records and timely preparation of financial

information. It is implemented to provide reasonable assurance about the

achievement of the entity’s objectives with regard to reliability of financial

reporting, effectiveness and efficiency of operations and compliance with

applicable laws and regulations. (Cabrera,2017)

Internal control for the proposed business was explained below.

(1) Internal control for cash; the management will place over the

restaurant security cameras as well as the cash register station to discourage

theft and provide a reference if the cashier comes up short. Collections of the

daily operations should be counted by the manager to match with the overall

receipts upon closing of the business. If amount of cash is correct, the manager

will deposit it to the savings account of the going healthy maintained at the Land

Bank of the Philippines during the next business day. (2) Internal control on

supplies; purchase supplies every two days for supplies that are prone to

spoilage like green leafy vegetables to ensure freshness and higher nutrients.
 47

Purchase of supplies should be made by the manager or upon authorization of

the manager. Manager is accountable for his/her actions. Internal control for

equipment is to repair and maintain the equipment every end of the month to

ensure high performance and maximizing its useful life. (3) Control on liabilities;

liabilities recorded by the bookkeeper should be properly supported by official

receipts and documents. The manager, after inspecting such records should

authorize the payments of liabilities. (4) Control on payment collection; customers

upon ordering should pay their bill to avoid non-payment. (5) Control on

expenses; expenses recorded by the bookkeeper should be properly supported

by official receipts and documents. Upon inspection and there are no

discrepancies, the manager should authorize the cashier to pay such expenses.

(6) Internal control payroll; access to payroll records and processes should only

be limited to authorized personnel like the bookkeeper and the manager. The

manager should regularly inspect the business’s payroll records to make sure

everything is accurate before authorizing the payment of payroll. Upon signing

the payroll sheet, they will receive their salaries.

Further, accounting aspect includes the narrative of the systems which

was enumerated and explained below.

(1) Cash receipt procedure; the cashier will be the one to receive the

payments of the customers which will be kept in the cash register until the end of

the business day operation. The next morning, it will be deposited by the

manager to the account of the business in the Land Bank of the Philippines. (2)

Cash disbursement procedure; the manager should inspect the cash

 48

disbursements journal to see whether amounts are accurate and supported. And

then he/she will supervise the disbursement of cash and will authorize the

cashier to make such disbursements. The cashier will now record the

disbursement of cash. (3) Payroll procedure; the Daily Time Record must both be

approved by the manager and the employee to ensure correctness of data before

it is to be given to the bookkeeper for the computation of the payroll. The

manager then approves the payroll and the cashier prepares the check to be

distributed to the employees. (4) Accounting procedure; the bookkeeper should

report once a week to consolidate the official receipts, transactions and

documents. Then he/she will record it in the journal to be used soon in the

preparation of the financial statements. The proposed business incorporated the

use of expense method and cash basis method. In expense method of recording

prepayments initially records the advanced payments as expense in its entire

amount, and at the end of the period, a portion has not yet expired and should be

recorded as asset. In cash basis method, all transactions should all be made on

cash, meaning, there was no accounts receivable and accounts payable.

(Valencia, et al., 2015)

F. FINANCIAL ASPECT

Financial Aspect determines the profitability level of the project which is

generally defined as the relationship of the net income after taxes to the total

investment. It is largely based on the available opportunity cost in a particular

period of time and place. This aspect also involves a thorough coverage of all

monetary information of the partnership. It covers detailed information on the

 49

total project cost, initial investment, financial statements and the financial

analysis.

Going Healthy Restaurant will be a VAT registered business. Creditable

input VAT account is used to show input VAT paid in the purchase of certain

resources.

Further, the statement of comprehensive income provides a summary of a

company’s net assets over a given period of time. In other words, the statement

highlights the adjustments on equity during a given timeframe. It contains two

main things: the net income and other comprehensive income (OCI). The net

income is the result obtained by preparing an income statement. On the other

hand, OCI consists of all the other items that are excluded from the income

statement. The figure that follows presents the projected statement of financial

operation of the proposed business: (Please refer to Appendix P, notes to

projected financial statements, for the details per account).

The projected net income of the proposed business continues to increase

which indicates that the proposed business could continue as going concern.
 50

GOING HEALTHY
POBLACION, BONTOC MOUNTAIN PROVINCE
STATEMENTS OF FINANCIAL OPERATION
For the Years Ended December 31, 2020, 2021, 2022, 2023 and 2024
(Amounts in Philippine Peso)

2019 2020 2021 2022 2023 2024

REVENUE - 4,077,434.67 4,281,306.40 4,485,178.14 4,723,028.49 4,960,878.85

LESS: COST OF SALES - 2,182,922.30 2,362,212.32 2,548,939.58 2,764,633.93 2,990,975.91
GROSS INCOME - 1,894,512.37 1,919,094.08 1,936,238.56 1,958,394.56 1,969,902.94
ADD: INTEREST INCOME - 2,422.47 1,382.52 1,413.24 1,485.93 1,509.87
TOTAL REVENUE - 1,896,934.84 1,920,476.60 1,937,651.80 1,959,880.49 1,971,412.81

LESS: EXPENSES
OPERATING EXPENSES:
Kitchen Supplies Expense - 23,010.00 23,010.00 23,010.00 23,010.00 23,010.00
Office Supplies Expense - 27,219.00 27,219.00 27,219.00 27,219.00 27,219.00
Maintenance Supplies Expense - 27,360.00 27,360.00 27,360.00 27,360.00 27,360.00
Salaries Expense - 832,685.22 832,685.22 832,685.22 832,685.22 832,685.22
SSS, Philhealth & HDMF Expense - 46,403.28 46,403.28 46,403.28 46,403.28 46,403.28
Depreciation Expense- Kitchen Tools and Equipments - 43,142.57 43,142.57 43,142.57 43,142.57 43,142.57
Depreciation Expense- Office Equipments - 13,745.85 13,745.85 13,745.85 13,745.85 13,745.85
Depreciation Expense- Furnitures and Fixtures - 17,297.10 17,297.10 17,297.10 17,297.10 17,297.10
Depreciation Expense - Other Assets - 3,977.89 3,977.89 3,977.89 3,977.89 3,977.89
Repairs and Maintenance - 1,650.00 1,815.00 1,996.50 2,196.15 2,415.77
Advertising Expense 8,000.00 - - - - -
Rent Expense 63,000.00 252,000.00 252,000.00 252,000.00 252,000.00 252,000.00
Taxes and Licenses 7,710.00 7,710.00 7,710.00 7,710.00 7,710.00 7,710.00
Uniform Allowance Expense 3,750.00 - - - - -
Utilities Expense - 182,259.71 187,835.22 193,468.67 199,271.12 205,247.65
Feasibility Cost 12,000.00 - - - -
Recruitment Expense 500.00 - - - - -
TOTAL EXPENSES 94,960.00 1,478,460.62 1,484,201.12 1,490,016.07 1,496,018.18 1,502,214.32

INCOME BEFORE TAX - 94,960.00 418,474.22 436,275.48 447,635.72 463,862.31 469,198.50

Income tax expense - 116,494.49 117,421.10 116,017.85 115,594.10 112,245.27
INCOME AFTER TAX - 94,960.00 301,979.73 318,854.38 331,617.88 348,268.22 356,953.23

Figure 3.7. Projected Statement of Financial Operation

Further, the statement of financial position reports an entity's

assets, liabilities, and the difference in their totals as of the final moment of

an accounting period. The structure of the statement of financial position is

similar to the basic accounting equation. It reflect the basic accounting principles
 51

and guidelines such as the cost, matching, and full disclosure principle to name a

few. The figure below presents the projected financial position of the proposed

business: (Please refer to Appendix P, notes to projected financial statements,

for the details per account.)

Figure 3.8. Projected Statement of Financial Position

 52

The projected financial position shows the assets, liabilities and equity of

the proposed business. From the figure, it can be inferred that the assets,

liabilities and equity continue to increase as years go by. It was a good indication

for the viability of the proposed business. It can be inferred that the proposed

business was capable to expand business operations.

On the other hand, statement of changes in partners’ capital shows the

changes in each partner's capital account for the year or period being reported

on. It has the same format as the statement of owner's equity except that it

includes a column for each partner and a total column for the company rather

than just one column. The statement starts with the beginning capital balance,

followed by the amounts of investments made, share of net income or loss, and

withdrawals made during the reporting period to determine the capital balance at

the end of the period. (Please refer to Appendix P, the notes to projected

financial statements for the details per account.)

The figure below shows the partner’s capital for a period of 5 years. It can

be inferred in the figure that the partner’s capital continues to increase with an

allowable withdrawal of ten thousand pesos each year. The partners share in the

profit and loss equally with a percentage of 20% each.

The partners’ capital has an average percentage increase of 24.8% for 5

years which indicates that the partners are earning from their initial investment.
53
 54

Figure 3.9. Projected Statement of Partners’ Capital

Further, the statement of cash flows is one of the three key financial

statements that reports the cash generated and spent during a specific period of

time. The statement of cash flows acts as a bridge between the income

statement and balance sheet by showing how money moved in and out of the

business.  The three sections of a cash flow are the operating, investing and

financing activities. The figure below presents the projected statement of cash

flows of the proposed business: (Please refer to Appendix P, the notes to

projected financial statements for the details per account.)

 55

Figure 3.10. Projected Statement of Cash Flows

The statement of cash flows shows that the cash inflows each year is

rapidly increasing each year. This implies that the business has a firm source of

cash which could contribute to the successful operation of the proposed

business.

Going further, the notes to financial statements are integral part of a

company's financial statements. These are required since not all the relevant

financial information can be communicated through the amounts shown (or not
 56

shown) on the face of the financial statements. The notes are also referred to

as footnote disclosures. Generally, the notes are the main method for a company

to comply with the full disclosure principle. (Please refer to appendix P for the

presentations of notes to projected financial statements of the proposed

business.)

Another way to further analyze if a business is operating well is by using

financial ratio analysis. Financial ratio is a comparison in fraction, proportion,

decimal or percentage form of two significant figures taken from the financial

statements. It expresses the direct relationship between two or more quantities in

the statement of financial position and income statement of a business firm.

Conducting ratio analysis provide insights into the profitability of operations and

soundness of the firm’s short term and long term financial condition to financial

statement users. (Cabrera, 2017)

According to the article shared by Nilima M., the importance of ratio

analysis is to aid to measure general efficiency, aid to measure financial

solvency, facilitate decision making, aid in corrective action, act as a good

communication, evaluation of efficiency, and detection of unfavorable factors.

Tables 14 and 15 below present the liquidity ratios of the proposed

business. Liquidity ratios measures firms’ ability to pay off its maturing short-term

liabilities.

Table 3.14. Current Ratio

2020 2021 2022 2023 2024

Current Asset 564,727.64 917,993.24 1,279,650.73 1,658,582.32 2,045,465.90

 57

Divided by:
Current
Liabilities 143,562.30 149,810.12 151,686.33 154,186.30 155,953.25

Current Ratio 3.93 6.13 8.44 10.76 13.12

Current ratio is a test of solvency to meet current obligations from current

assets as a going concern. The ratio indicates the margin of safety by which a

firm can meet its obligations falling due within the year from such assets easily

convertible into cash within the year. It answers the question “how many pesos in

current assets are there to cover each peso in current liabilities”.

Current ratio of the proposed business was incredibly increasing at a high

rate. As an analysis, it was due to the high increase in current assets paired with

low increase in current liabilities. The proposed business current ratio was

increasing; it means that it’s a positive factor to the business. As of 2020, the

current ratio was 1:3.96, which means that for every 1-peso liability, there is 3.96

peso in current assets to pay such liability.

Table 3.15. Working Capital Ratio

2020 2021 2022 2023 2024
Current
Asset 564,727.64 917,993.24 1,279,650.73 1,658,582.32 2,045,465.90
Less:
Current
Liabilities 143,562.30 149,810.12 151,686.33 154,186.30 155,953.25
Working
Capital 421,165.34 768,183.12 1,127,964.40 1,504,396.02 1,889,512.65
Working capital is the capital of the business which is used in its day to

day operations. It represents the amount left over a firm to pay off its immediate

liabilities.
 58

The proposed business working capital did increase at a great range from

2020 to 2024 which was a good factor to the business. The business would be

able to pay off its short term liabilities. From the table, it could be inferred that the

proposed business might be able to expand its operations.

Tables 3.19 and 3.20 present the profitability ratios of the proposed

business. Profitability ratios measure management’s overall effectiveness at

generating profits.

Table 3.16. Operating Profit Margin

2020 2021 2022 2023 2024
Net Income/
Loss before
Tax 418,474.22 436,275.48 447,635.72 463,862.31 469,198.50
Divided by: 4,077,434.6 4,281,306.4 4,485,178.1 4,723,028.4 4,960,878.8
Sales 7 0 4 9 5
Operating
Profit
Margin 10% 10% 10% 10% 9%
Operating profit margin is a measure of overall operating efficiency and

incorporates all of the expenses associated with normal business activities.

Operating profit margin of the proposed business was fairly stable which means

that sales and net income before tax were increasing proportionately. This

means that the business tried to increase its sales but did not mitigate to lower

the costs and expenses. If the business would mitigate cost and expenses while

maximizing sales, then operating margin would increase.

Table 3.17. Return on Investment

2020 2021 2022 2023 2024
Net Income
after Tax 301,979.73 318,854.38 331,617.88 348,268.22 356,953.23
Divide by: 1,100,582.0 1,375,684.2 1,659,178.3 1,959,946.5 2,268,666.6
Total Assets 3 3 2 0 8
Return on 27% 23% 20% 18% 16%
 59

investment
Return on investment is a profitability ratio that calculates the profits of an

investment as a percentage of the original cost.

It can be inferred from the table that the return on investment of the

proposed business continuously to decline. However, the continuous decline is

not alarming since the decline is due to the faster increase in the total asset.

Assets were not utilized enough to increase net income thus making the return

on investment to decrease. From the financial statements, cash was the one that

made the total assets relatively high, so the business will consider investing its

cash in time deposit and expand its operations. By doing so, assets would be

utilized resulting to higher return while starting another branch.

Tables 18 and 19 present the solvency ratio of the proposed business.

Solvency ratio measures the extent to which a firm is financed by debt.

Table 3.18. Debt to Asset Ratio

2020 2021 2022 2023 2024
Total
Liabilities 143,562.30 149,810.12 151,686.33 154,186.30 155,953.25
Divide by: 1,100,582.0 1,375,684.2 1,659,178.3 1,959,946.5 2,268,666.6
Total Assets 3 3 2 0 8
Debt to
Asset Ratio 13% 11% 9% 8% 7%

Debt to asset ratio is a leverage ratio that measures the amount of the

total assets that were financed by creditors instead of investors. Investors use

the ratio not only to evaluate whether the business has enough funds to meet its
 60

obligations but also to assess whether the business could pay a return on their

investment.

Debt to asset ratio of the proposed business continues to decrease which

means that the business did not rely too much on debt financing. In the financial

statements, it could be inferred that the business is financed by investors. It can

be deducted that creditors would be willing to extend loan to the business due to

low debt to asset ratio.

Table 3.19. Debt to Equity Ratio

2020 2021 2022 2023 2024
Total 143,562.3
Liabilities 0 149,810.12 151,686.33 154,186.30 155,953.25
Divided by:
Partners' 957,019.7 1,225,874.1 1,507,491.9 1,805,760.2 2,112,713.4
Capital 3 1 9 0 3
Debt to
Equity Ratio 15% 12% 10% 9% 7%

Debt to equity ratio is a financial, liquidity ratio that compares a business

total debt to total equity. It shows the percentage of business financing that

comes from creditors and investors.

The proposed business debt to equity ratio was declining which means

that the business relies mostly on equity rather than debt financing. And a lower

debt to equity ratio usually implies a more financially stable business.

Table 20 below presents the Bail-out Payback Period of the proposed

business.

Table 3.20. Bail-out Payback Period

 61

Expected Cash Cumulative Cash Payback

Year Flows Flows Period
Year 0 - 800,000.00 - 800,000.00 0
Year 1 301,979.73 - 498,020.27 1
Year 2 318,854.38 - 179,165.89 1
Year 3 331,617.88 152,451.99 0.54
Payback Period 2.54

Payback period is the length of time required for an investment to recover

its initial outlay in terms of profits or savings. The shorter the payback period the

better and means more additional investments (www.investopedia.com).

The payback period of the proposed business was 2.54 years or 2 years 7

months. This implies that partners would recover their investments within 2 years

and 7 months. This payback period is a good implication to the business as

investors recover investments in a short span of time.

Factors Affecting the Viability of a Healthy Restaurant in Bontoc, Mountain

Province

Before a business is established, there are a lot of factors needed to be

taken into consideration which affects its viability. An entrepreneur needs to

determine whether the business idea they have in mind is viable or not by

evaluating the impact of such factors to the business.

 62

To be able to determine the viability of establishing a healthy restaurant in

Bontoc, Mountain Province, some factors affecting the viability of establishing the

restaurant were identified. The factors were: 1) Advertisement of business, 2)

Retaining of customers other than the regular customers, 3) Quality of services

and foods are very satisfactory, 4) Presence of competitors in the market, 5)

Supplies of new materials are abundant, 6) Reactions of the community towards

healthy products, 7) Prices of foods offered are very affordable, 8) Health

benefits of the products, 9) Ambiance of the restaurant; and 10) Healthy lifestyle

is a trend nowadays.

Survey questions regarding such factors were distributed for ranking. The

figure in the next page presents the results of the ranking: (Please refer to

Appendix G question number 6 for the details of the ranking.)

 63

According to the results of the ranking, quality of services and foods are

very satisfactory ranked first, prices of foods offered are very affordable ranked

second and the health benefits of the products ranked third. Presence of

competitors in the market ranked last. Reactions of the community towards

healthy products ranked second to the last while healthy lifestyle is a trend

nowadays ranked third to the last. This implies that presence of competitors in

the market has the least effect on the viability of establishing a healthy restaurant

in Bontoc, Mountain Province over the reactions of the community towards

healthy products and healthy lifestyle being a trend nowadays.

Figure 3.11. Ranking of Factors

 64

The result of the survey shows that quality comes first before the price and

health benefits as for the respondents. According to Andres Cuyasan, PhD., one

of the respondents, quality is preferred over price and benefits because if the

quality of a product or service of a business meets the requirements of a

customer, it will create a customer loyalty regardless of the price or health

benefits of the product. He also emphasized that price is connected with quality

in such a way that even if a product is expensive if it has a good quality, a

customer will still not hesitate to buy it. He said that price matters over health

benefits most especially for those who are low income earners since they would

still prefer cheaper products regardless of its health benefits.

Mr. Sampson Quain, a business expert, also mentioned that quality is a

key differentiator in a crowded market. Quality products help to maintain

customer satisfaction and loyalty and regardless of what industry you’re involved

in, your customers aren’t going to choose you solely based on price or benefits

but often on quality.

“Customers always come back when a product is good, even if the price is

high. A quality product creates unshakeable customer loyalty that generates

increased leads. When customers find a product they trust, they return, make

repeat purchases and recommend the product or service to others” (Alton, Larry).

According to Andres Cuyasan, PhD., a respondent, healthy lifestyle being

a trend nowadays and the reactions of the community towards healthy products

affects the viability of establishing a healthy restaurant in Bontoc, Mountain

 65

Province more than the presence of competitors in the market in the sense that

employees in Bontoc (which are the respondents) are health conscious and they

put much consideration on the health benefits they will get from the food they eat.

If a business firm satisfies the requirements for healthy foods of customers like

them, they will not turn their back easily on such business firm. He also

mentioned that presence of competitors will not matter once a customer’s loyalty

is gained. Once the trust of customers is earned, they will always buy from the

business firm they trust.

Meeting the customers’ requirements leads to customer retention (Patel

and Neil, 2018). Retaining customer loyalty is regarded as a strategy to maintain

a competitive edge (Gronroos, 2009).

 66

CHAPTER 4

CONCLUSIONS AND RECOMMENDATIONS

Conclusion:

1. Based on the findings, the establishment of a healthy restaurant in

Poblacion, Bontoc Mountain Province is viable.

2. Based on the results of the ranking done by the respondents, quality of

foods and services are very satisfactory ranked first, prices of foods

offered are very affordable ranked second and the health benefits of the

products ranked third. On the other hand, healthy lifestyle is a trend

nowadays ranked third to the last while reactions of the community

towards healthy products ranked second to the last. The presence of

competitors in the market ranked last.

Recommendation:

1. As it was shown that the proposed business is viable, it is highly

recommended that it will be established. It is also highly recommended

that the business will offer deliveries especially to the far offices for

additional revenue. Kiddie meals is also recommended for additional gain.

 67

2. As the quality of products and services affects the viability of establishing the

proposed healthy restaurant the most, it is highly recommended that the

business should focus on providing and maintaining quality of foods and

services to attract more customers and maintain customer loyalty. The

business should also consider organic agricultural produce to be used as

ingredients whenever available aside from using agricultural produce from

good agricultural practices.

 68

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 72

APPENDIX A:

Letter to Adviser
 73

Letter to Municipal Planning and Development Office

 74

Letter to Respondents
 75

APPENDIX B:

Sample Questionnaire

Pls. put a check mark on the box (√) or the space (√) provided that corresponds
to your answer, whichever is appropriate.

1. Do you order healthy food when you go for a meal at a restaurant?

__yes __no
*if your answer is “no”, please proceed to #3
2. Do you have a preferred establishment where you buy healthy food?
__yes __no
3. If we will establish a restaurant offering healthy foods, are you
willing to come and eat?
__yes __no
*if your answer is “no”, please proceed to #8
4. What menu and how much are you willing to spend?
Menu Price Range
(In Pesos)
Combination 1 170- 190- 210-229
Appetizer: 189 209
Bugnay Wine
Main Course:
Kidney Bean Salad (a good mix of kidney beans,
diced cucumber, chopped celery and green onions in a
tasteful dressing)
Dessert:
Egg Pie

Combination 2 190- 210- 230-249

Appetizer: 209 229
Bugnay Wine
Main Course:
Mushroom omelet
(cheesy and eggy roll of mushrooms and vegetables,
served with mini-salad and brown rice)
Dessert:
Egg Pie

Combination 3 240- 260- 280-299

Appetizer: 259 279
Bugnay Wine
 76

Main Course:
Beefy mushrooms
(served with mini salad and brown rice)
Dessert:
Egg Pie

Combination 4 190- 210- 230-249

Appetizer: 209 229
Bugnay Wine
Main Course:
Vege Meat Sisig
(served with mini-salad and brown rice)
Dessert:
Egg Pie
Combination 5 190- 210- 230-249
Appetizer: 209 229
Bugnay Wine
Main Course:
Vege Meat Curry
(served with mini-salad and brown rice)
Dessert:
Egg Pie
Combination 6 220- 240- 260-279
Appetizer: 239 259
Bugnay Wine
Main Course:
Caesar salad
(an all-time favorite of mixed lettuce, cucumber strips, corn
kernels and vege meat)
Dessert:
Egg Pie
Budget Meal: 60-69 70-79 80-89
Vege Meat
(mixture of variety of a vegetables and tofu)
Chicken Breast 70-79 80-89 90-99
(steamed chicken topped with onion leeks; served with
veggies)

5. What beverages do you prefer?

@220ml @350ml
Pure Carrot Juice P65 P75
Pure Cucumber Juice P65 P75
Carrot Apple Juice P75 P85
Carrot Apple Cucumber Juice P85 P95
Cucumber Celery Juice P65 P75
Lemon Grass Iced Tea P45 P55
Turmeric Tea P45 P55
 77

Reg. Mug
Arabica Coffee (Iced/Hot) P25 P35
Service Water –hot or cold- -Free-

6. Are you satisfied with the price/s you chose?

__yes __no
*if your answer is “no”, what is/are the reason/s?
7. How often are you willing to come?
__once a week __everyday
__thrice a week __sometimes

6. Below are the following factors affecting the viability in establishing

a healthy restaurant. Please arrange them from 1 to 10 on which, one
(1) having the greatest effect and ten (10) having the least effect.
(1,2,3,4,5,6,7,8,9,10)
No repetition of rank.

FACTORS RANK
1. Advertisement of business.
2. Retaining of customers other than the regular customers.
3. Quality of services and foods are very satisfactory.
4. Presence of competitors in the market.
5. Supplies of raw materials are abundant.
6. Reactions of the community towards healthy products.
7. Prices of foods offered are very affordable.
8. Health benefits of the products.
9. Ambiance of the restaurant.
10. Healthy lifestyle is a trend nowadays.
Others (pls. specify) __________________
 78

APPENDIX C:

Articles of Partnership:

Going Healthy

KNOW ALL MEN BY THESE PRESENTS:

That, we the undersigned partners, all of legal age and residents

of the Republic of the Philippines

have agreed to create a general partnership under the terms and conditions

herein after set forth and subject to the provisions of existing laws

of the Republic of the Philippines.

AND WE HEREBY CERTIFY:

ARTICLE I. That the name of the partnership shall be

Going Healthy

ARTICLE II. That the principal office of the Partnership shall be located in the

basement of Kedawen Building at Barangay Poblacion, Bontoc Mountain

Province.

ARTICLE III. That the names, citizenship and residence of the partners of the

said partnership are as follows:

 79

Name Citizenship Residence

Rubilyn P. Cuyangoan Filipino Dacudac, Tadian, Mountain Province
Reynaldo C. Diaten Jr. Filipino Bila, Bauko, Mountain Province
Franklin M. Mamilig Filipino Dalican, Bontoc, Mountain Province
Fredie G. Jun Onio Filipino Tabio, Mankayan, Benguet
Gladys C. Sawi Filipino Mainit, Bontoc, Mountain Province

ARTICLE IV. That the partnership is a partnership at will which may be

terminated anytime by mutual agreement of the partners.

ARTICLE V. That the purposes for which said partnership is formed are as

follows:

 To provide greater capital to operate the business.

 To benefit the community by providing employment and payment of taxes.

ARTICLE VI. That the capital of this partnership shall be 2,804,628.29 in

Philippine currency contributed in cash by the partners as follows:

Name of Partner Capital & Amount Contributed

Profit/Loss Ratio

Rubilyn P. Cuyangoan 20% 160,000.00

Reynaldo C. Diaten Jr. 20% 160,000.00

Franklin M. Mamilig 20% 160,000.00

Fredie G. Jun Onio 20% 160,000.00

Gladys S. Sawi 20% 160,000.00

Total 100% 800,000.00

ARTICLE VII. That the profits and losses shall be divided equally.
 80

ARTICLE VIII. That the partnership will hire a Manager to oversee the daily

operation of the business and submit a report to the partners thereon.

ARTICLE IX. That the partners undertake to change the name of the partnership

immediately upon receipt of notice or directive from the Securities and Exchange

Commission that another partnership, corporation or person has acquired a prior

right to the use of that name or that the name has been declared misleading,

deceptive, confusingly similar to a registered name, or contrary to public morals,

good customs or public policy.

IN WITNESS WHEREOF, we have hereunto set our hands this 1 st day of May

2018 at Poblacion, Bontoc, Mountain Province, Philippines.

Rubilyn P. Cuyangoan Reynaldo C. Diaten Jr. Franklin M. Mamilig

Partner Partner Partner

Fredie Jun G. Onio Gladys C. Sawi

Partner Partner

Signed in the presence of:

Chris Hemswerth Kari C. Jobe

Witness Witness
 81

APPENDIX D:

BY LAWS

Going Healthy Partnership

Article I Organization and officers of the partnership

Section 1 Composition

The officers of the partnership shall compose of 3 members which is the

president, secretary, and treasurer.

Section 2 Officer’s requirements

The said four members should be a partner and elected by the partners

themselves.

Section 3 Term of office

The officers of the partnership shall have a term of 1 year and no officer

shall hold same position for 2 consecutive term.

Section 4 Election/vacancies

Election of officers shall be the first meeting of the calendar year before

transacting any other business and any vacant position shall be filled at a

regular meeting. An officer so elected shall fulfill the term of his/her

predecessor.

Section 5 Authority and Duties of officers

The officers shall have the duty and responsibility as follows:

a. President. The president shall preside at and conduct all meeting

whether regular or special. He/she may also serve as a

 82

representative in meetings and discussions with other organizations

and agencies as well as to sign contracts in the name of the

partnership.

b. Secretary. The secretary shall keep accurate records and minutes

of meetings of the partnership as well as maintaining the minute’s

book of the partnership. He/she may also give copies of book and

records of the partnership to a concerned citizen except those

records or information that are legally protected.

c. Treasurer. The treasurer shall oversee the funds of the corporation,

the preparation of the books and records of the partnership and the

preparation of financial reports for each regular meeting. He/she

shall perform all duties incident to the office of the treasurer.

Section 6 Removal of officers

An officer may be removed by majority vote of the partners.

Section 7 Resignation

An officer may resign at any time upon submitting written resignation to

the president and if the resigning officer is the president, to all of the

partners.

Article II Meetings of the partnership

Section 1 Regular Meeting

 83

Regular meeting of the Partnership shall be held four times each

calendar year. Any member is allowed to speak during the meeting if

recognized by the partnership president.

Section 2 Special Meeting

Special meeting shall be held anytime when called upon by the president.

Section 3 Notice of Meeting

A written notice of each special and regular meeting shall be given 7 days

before the said meeting.

Section 4 Voting

All members shall have the right to vote and one member is equivalent to

one vote. Proxy is not allowed at partnership meetings thus they are not

also allowed to vote.

Section 5 Quorum

The number of partners to constitute a quorum shall be 3. A majority of

those present may adjourn a meeting of the partnership and the meeting

may be held as adjourned without further notice.

Article III By-law Amendments

These bylaws may be amended at the recommendation of a partner and by a

majority vote of members present and voting at any special or regular meeting.
 84

APPENDIX E:

CONTRACT OF LEASE

KNOWN BY ALL MEN THIS CONTRACT:

This CONTRACT OF LEASE made and entered into by and between: Mr. Mario

F. Kedawen, of legal age, Filipino, married and a resident of Mainit, Bontoc

Mountain Province, Philippines, hereinafter referred to as the LESSOR.

-and-

Going Healthy Restaurant, a partnership business duly registered, organized and

existing under Philippines laws represented herein by Ms. Gladys C. Sawi,

hereinafter to as the LESSEE.

-witnesseth-

WHEREAS, THE LESSOR is the registered and absolute owner of the six (6)

story concrete and commercial building situated 50-75 meters away from the

municipal hall in Poblacion, Bontoc. Moreover, the LESSOR desires to lease the

afore-described property.

WHEREAS, the LESSEE has formally intended to lease a business space owned

by the LESSOR, Mr. Mario F. Kedawen, for Going Healthy Restaurant.

Now, therefore, the lease is subject to the terms and conditions, to wit:
 85

1. That the subject of lease will be the Basement, Kedawen Building, with an

area of approximately 1,7640 square feet located in Poblacion, Bontoc,

Mountain Province.

2. That this contract of lease commences from July 01, 2019 but the

payment will start on the month of October 01, 2019 before the final

furnishing of the business site. As agreed, said contract shall be

renewable for another 10 years at the option of the LESSEE, and

thereafter renewable upon mutual agreement of the parties.

3. The LESSOR has no right to evict the LESSEE within the term of the said

contract.

4. That the monthly rentals on the leased premises above-mentioned shall

be P 20,000.00. The rentals shall be paid by the LESSEE to the LESSOR

on a monthly basis payable on or before the 5 th day of every month.

5. The LESSEE shall not allow or permit the leased premises to be occupied

in whole or in part by any person or entity and no right of interest thereto

or therein shall be conferred on or vested in anyone by the LESSEE

without the LESSOR’s written approval.

6. The LESSEE shall pay for its electric, water and utilities during the

duration of the lease but the LESSOR shall provide water tank.

7. It is expressly agreed by the parties herein that any fixed improvement or

renovations that will be introduced in the subject shall become the

property of the LESSOR after the expiration of the term of this Contract.
 86

(Name of Lessor) MR. MARIO F. KEDAWEN

(Name of Lessee) MS. GLADYS C. SAWI

Signed in the presence of:

______________________ ______________________
Signature over Printed Name Signature over Printed Name
 87

APPENDIX F:

Barangay 2014 2015 2016 2017 2018

Bontoc Ili 4,791 4,787 4,878 4,936 4,915
Caluttit 2,071 2,102 2,117 2,126 2,136
Poblacion 3,168 3,152 3,145 3,184 3,203
Samoki 2,946 2,938 2,845 2,836 2,958
Grand Total 12,976 12,979 12,985 13,082 13,212
Actual Population from 2014 to 2018

Source: Municipal Planning and Development Office, LGU-Bontoc

Barangay 2019 2020 2021 2022 2023 2024

Bontoc Ili 4,940 4,964 4,989 5,014 5,039 5,064
Caluttit 2,147 2,157 2,168 2,179 2,190 2,201
Poblacion 3,219 3,235 3,251 3,268 3,284 3,300
Samoki 2,973 2,988 3,003 3,018 3,033 3,048
Grand Total 13,278 13,344 13,411 13,478 13,546 13,613
Projected Population from 2019 to 2024

Note: The population growth is 0.05% every year

The 0.05% population growth was computed based on the actual

population from 2014 to 2018 of the four barangays using the moving average

method.

APPENDIX G:
 88

Results of Survey

1. Do you order healthy food when you go for a meal at a restaurant?

__yes __no

  VOTES Percentage
Commodities YES NO Total YES NO TOTAL
Healthy foods 326 62 388 84% 16% 100%

The purpose of this question was to determine if the target markets are

actually availing of the proposed products and the result showed that 84% of the

whole target market were availing the proposed products.

2. Do you have a preferred establishment where you buy healthy food?

__yes __no
Choices Responses Percentage
YES 235 72%
NO 91 28%
Total 326 100%

This question was asked to recognize any potential competition. The survey

showed that 72% of the whole target market has a preferred restaurant therefore

resulting to competition.

3. If we will establish a restaurant offering healthy foods, are you

willing to come and eat?

__yes __no
Choices Responses Percentage
YES 384 99%
NO 4 1%
Total 388 100%

The aim of this question was to pinpoint the potential customers of the
proposed business. Potential customers here include those that have preferred
restaurants. The survey showed that 99% of the whole target market was willing
to avail of the proposed products of the business.
 89

4. What menu and how much are you willing to spend?

Menu Number of Votes

Combo 1 Kidney Bean Salad 261
Combo 2 Mushroom Omelet 249
Combo 3 Beefy Mushroom 225
Combo 4 Vege Meat Sisig 232
Combo 5 Vege Meat Curry 228
Combo 6 Caesar Salad 250
Budget meal 1 Vege Meat 270
Budget meal 2 Chicken Breast 268
Total 1,984

The purpose of this question was to ask the target market which among the

offered meals were they willing to avail and at what price. The survey showed

that all of the proposed products were chosen. The survey also showed that the

most voted price was the lowest offered price.

 90

5. What beverages do you prefer?

Beverage Number of Votes

Pure carrot juice  
220 ml 163
350 ml 42
Pure cucumber juice  
220 ml 141
350 ml 54
Carrot apple juice  
220 ml 124
350 ml 39
Carrot apple cucumber juice  
220 ml 127
350 ml 45
Cucumber celery juice  
220 ml 125
350 ml 42
Lemon grass tea  
220 ml 164
350 ml 50
Turmeric tea  
220 ml 121
350 ml 26
Arabica coffee  
Regular 206
Mug 68
Total 1,535
The purpose of this question was to ask the target market which among the

offered beverages were they willing to avail and at what price. The survey

showed that all of the proposed beverages were chosen whether at 220 ml or at

350 ml but the 220 ml gained more preference.

6. Below are the following factors affecting the viability of establishing

a healthy restaurant. Please arrange them from 1 to 10 on which, one

 91

(1) having the greatest effect and ten (10) having the least effect.

(1,2,3,4,5,6,7,8,9,10)

No repetition of rank.

FACTORS RANK

11. Advertisement of business. 6

12. Retaining of customers other than the regular customers. 7

13. Quality of services and foods are very satisfactory. 1

14. Presence of competitors in the market. 10

15. Supplies of raw materials are abundant. 5

16. Reactions of the community towards healthy products. 9

17. Prices of foods offered are very affordable. 2

18. Health benefits of the products. 3

19. Ambiance of the restaurant. 4

20. Healthy lifestyle is a trend nowadays. 8

Others (pls. specify) __________________

 92

The question aims to identify the factors that have the greatest effect and

the least effect on the viability of establishing a healthy restaurant in Bontoc,

Mountain Province. The survey showed the top three factors that has the

greatest effect were: (1) Quality of services and foods are very satisfactory, (2)

Prices of foods offered are very affordable and; (3) Health benefits of the

products. It also showed the top three factors having the least effect were: 1)

Presence of competitor in the market; 2) Reactions of the community towards

healthy products and; 3) Healthy lifestyle is a trend nowadays.

 93

MENU

Combination 1: Kidney Bean Salad

Combination 2: Mushroom Omelet

 94

Combination 3: Beefy Mushroom

Combination 4: Vege Meat Sisig

 95

Combination 5: Vege Meat Curry

Combination 6: Caesar Salad

 96

Budget Meal 1: Vege Meat

Budget Meal 2: Chicken Breast

 97

BEVERAGES

Pure Carrot Juice

Pure Cucumber Juice

 98

Carrot Apple Juice

Carrot Apple Cucumber

 99

Cucumber Celery Juice

Lemon Grass Tea

 100

Turmeric Tea

Arabica Coffee
 101

APPENDIX H:

Computation Of Annual Normal Capacity

The normal capacity of 80% was based on the number of workers and the

size of the proposed business place as well as the observations done by the

researchers. The length of time to cook the meals and prepare the beverages

were also considered along with the length of time it takes for a customer to

finish eating.

The 5% normal capacity increase of the proposed business is due its

better strategies and increased skills of workers.

 102

Allocation of Normal Capacity

 103

The normal daily normal capacity each year for each menu was computed

by dividing the number of votes for each menu to the total number of votes then

multiplying it to the normal capacity each year.

Summary of Sales for the Year 2020

(311 working days)

 104

Summary of Sales for the Year 2021

(311 working days)

 105

Summary of Sales for the Year 2022

 106

Summary of Sales for the Year 2023

 107

Summary of Sales for the Year 2024

 108

The annual sales from 2020 to 2024 was computed by multiplying the normal

capacity per day by the number of operating days of the proposed business per

year, which is 311 days, multiplied by price of each menu.

Consolidated Sales
 109

APPENDIX I:

Designs of Advertising Materials

1. Light Box
 110

2. Tarpaulin
 111

3. Flyers
 112

4. Signage
 113

APPENDIX J:

Projected Cost

Going Healthy
Poblacion, Bontoc
Total Project Cost
  Amount (PhP)

Direct Cost Cash 19,696.46

Kitchen Tools and
  Equipment 307,340.27
  Office Equipment 76,365.84
  Furniture and Fixture 192,190.00
  Other Assets 38,121.69
  Total Direct Cost 633,714.25
Indirect Cost  
  Advertising Expense 8,000.00
  Feasibility Cost 12,000.00
  Taxes and Licenses 7,710.00
  Recruitment Expense 500.00
  Kitchen Supplies 7,670.00
  Office Supplies 9,073.00
  Maintenance Supplies 9,120.00

  Rent Expense 60,000.00

  Withholding Tax Expense 3,000.00
  Utilities Expense -

  Uniform Allowance Expense 3,750.00

  Creditable Input VAT 45,462.75
  Total Indirect Cost 166,285.75
Total Project Cost   800,000.00
   
Initial Investment of
Partners  
  Ruby Cuyangoan 160,000.00
  Reynaldo Jr. Diaten 160,000.00
  Franklin Mamilig 160,000.00
  Fredie Jun Onio 160,000.00
  Gladys Sawi 160,000.00
Total   800,000.00
 114

Feasibility Cost

Materials 8,000.00
Data Gathering Expenses 2,000.00
Researcher's Snacks and Meals 2,000.00
Total 12,000.00
Purchases at Tiongsan, Baguio City
 115

APPENDIX K:
 116

Interior Designs

Reception Area

This area is where the customers will order their meals and

beverages and at the same time where they will pay their bills.

Kitchen Area

This area is where the ordered meals and beverages will be

prepared. This area consists of kitchen equipment, utensils and

others. It also includes the storage area for the kitchen materials

and supplies.
 117

Dining Area

This is where our customers will enjoy their meals and beverages.
 118

Manager’s Office

This area is designated as the working place of the manager.

 119

Storage Room

This area will serve as a storage room for the supplies needed.
 120

Stock cabinet

This area is where the kitchen inventories, supplies, commodities are

being stocked.

APPENDIX L:

Taxes and Licenses

Taxes and Licenses Amounts(in Php)
Mayor's Permit 1,050.00
Miscellaneous Fees 1,155.00
Business Tax 1,500.00
BIR Annual Registration 500.00
Regulatory Fees
Barangay Clearance 30.00
Police Clearance 45.00
Business Plate 130.00
Business Sticker 100.00
 121

Fire Safety Inspection Certificate 155.00

Sanitary Permit/Urinary Analysis/SA/MC/SIF 270.00
Cedula (Manager) 5.00
Cedula (Business) 180.00
Garbage Fee 600.00
Water Certificate 50.00
Water Fee 1,440.00
DTI Registration 500.00
TOTAL 7,710.00
Note: The fees were provided by the LGU Treasury Office- Bontoc as of 2019.

SCHEDULE OF PRICES OF PURCHASES

Office Equipment
Equipment Description No. of Unit Price Total Price
Unit
Computer Set  1 monitor 1 Unit P25,650.00 P25,650.00
(Acer)  1 CPU
 1 Pair
Speaker
 1 Mouse
 1 Keyboard
Cash Register  1 unit 1 unit P13,750.00 P13,750.00
automatic
cash
register.
Printer (Epson)  1 unit 3-in 1 1 unit P7,500.00 P7,500.00
printer
(scanner,
photocopier
, printer)
LCD TV (LG 32 in.)  1 unit 1 unit P12,400.00 P12,400.00
Television,
LG brand,
32 inches
wide
 122

Surveillance  4 closed 1 Set P20,000.00 P20,000.00

Camera (Sricam) circuit
cameras
 1 black box

Globe Broadband  1 unit 1 Unit P 2,000.00 P 2,000.00

Router internet
router

TOTALS P81,300.00
Note: All office equipment will be purchased at Tiongsan, Baguio City except for
the surveillance camera and globe broadband router that can be purchased here
in Bontoc.

Office Supplies

Equipment Description No. of Unit Price Total Price

Unit
Ball Pen  Brand: 1 Box P300.00 P300.00
HBW


Columnar Book  Brand: 2 25.00 50.00

Valiant Units

Record  Brand: 1 Unit 73.00 73.00

Book(500p) Valiant

General Journal  Brand: 2 35.00 70.00

Valiant Units

Receipt  1 booklet is 100 50.00 5,000.00

50 pages bookl
ets
 123

General Ledger  Brand: 2 35.00 70.00

Valiant Units

Bondpaper (A4)  Brand: 1 P 165.00 P 165.00

Cactus Pack
 1 pack is
500 pages

Ink (Black and Tri-  Brand: 1set 650.00 650.00

color) Epson

Stapler Wire  Brand: 1 Box 150.00 150.00

Kangaroo

Stamp Pad  Brand: 1 unit 35.00 35.00

Artline

Rubber Stamp  Stamp 1 unit 320.00 320.00

(Logo) contains the
business
logo
 124

Folder  Size: 10 7.00 70.00

20.32cm pcs
x33.02”
 Brand:
Phoenix

Calculator (Casio)  12 digit 2 P580.00 P1,160.00

basic units
calculators

Stamp Pad Ink  Brand: 1 unit 280.00 280.00

` Brother
 Tri-color

Scissor  Brand: 2 pcs 150.00 300.00

HBW

Swingline Stapler  Brand: 1 pc 380.00 380.00

HBW

TOTAL P9,073.00
Note: All of this office supplies will be purchased from JJ&A Marketing, Bontoc,
Mountain Province except for the receipt which will be purchased at Aijay’s
Marketing.

Kitchen Tools and Equipment

Tools and Description No. of Unit Price Total Price

Equipment Units
 125

Saucer  Brand: 3 P240.00 P720.00

Melawares Dozen

Plate  Brand: 5 600.00 3,000.00

Melawares Dozen

Soup Bowl  Brand: 5 350.00 1,750.00

Melawares Dozen

Kettle  Brand: 2 Units 270.00 540.00

Stainless
Steel

Rice Cooker  Brand: 2 Units 2,495.00 4,990.00

(10 lit) Standard
 Capacity:
10 liters
 126

Frying Pan  Brand: 4 Units P6,074.00 P24,296.00

(3.7 Lit.; 26cm ) Tupperware
 Diameter:
26 cm

Stock Pot  Brand: 3 Sets 6,750.00 20,250.00

(7 lit, 24 cm) Tupperware
 Diameter:
24 cm

Wok (8.9  Brand: 3 Units 8,399.00 25,197.00

Lit;38cm) Tupperware
 Diameter:
38 cm

Casserole (3.7  Brand: 3 Units 5,024.00 15,072.00

Lit.;21 cm) Tupperware
 Diameter:
21 cm

Small Cooking  Brand: 2 Sets 1,000.00 2,000.00

Pots Set Tupperware

Chafing Dish  Brand: 10 350.00 3,500.00

Tupperware Units
 127

Kitchen Scale  Brand: 1unit P 350.00 P350.00

Eureka

Cooking Utensils  Brand: 3 sets 620.00 1,860.00

Set Tupperware

Serving Spoons  Brand: 20 65.00 1,300.00

Tupperware Units

Regulator  Brand: 3 Units 180.00 540.00

Gasbooster

Knife  Brand: 3 Units 320.00 960.00

Masflex

Chopping Board  Size: 3 units 180.00 540.00

30cm
x25cm

Basin  Brand: 2 Units P150.00 P300.00

S.S.P.I.
 Diameter:
45 cm

Tea Spoon  Brand: 3 80.00 240.00

Tupperware Dozen
 128

Fork  Brand: 3 90.00 270.00

Tupperware Dozen

Spoon  Brand: 3 90.00 270.00

Tupperware Dozen

Drinking  Size: 20 cm 50 30.00 1,500.00

Stainless Straw pieces

Tong  Brand: 20 35.00 700.00

Stainless Units
Steel

Glass  Height: 15 3 P180.00 P540.00

cm Dozens
 129

Wine Glass  Height: 15 3 780.00 2,340.00

cm Dozens

Small Mugs  Height: 7 3 180.00 540.00

cm Dozens

Big Mugs  Height: 11 3 300.00 900.00

cm Dozens

Container Refill  Capacity: 4 Units 250.00 1,000.00

20 liters

Strainer  Brand: 3 Units 120.00 360.00

Stainless
Steel

Pitcher  Brand: 15 P 230.00 P 3,450.00

Tupperware Units
 Capacity: 2
liters
 130

Plastic Rectangle  Size: 38 cm 12 75.00 900.00

Tray x 38 cm Units

Cutlery Organizer  Brand: 1 250.00 250.00

Melaware

Stainless Steel  Brand: 4 Units 245.00 980.00

Glass/Mug Stainless
Holder Steel

Wine Glass  Brand: 4 Units 105.00 420.00

Holder Stainless
Steel

Sugar Container  Brand: 5 Units 45.00 225.00

Melaware

Seasoning  Brand: 5 Units P 55.00 P 275.00

Container Melaware
 131

Condiments  Brand: 12 50 600.00

Holder Stainless Units
Steel

Condiments  Brand: 12 Sets 60 720.00

Container Set Melaware

Modular  Brand: 2 Units 1,850.00 3,700.00

Stainless Steel Stainless
Kitchen Rack Steel

Tissue Holder  Brand: 12 25.00 300.00

Stainless Units
Steel

Gas tank  Capacity: 12 3 Units P2,000.00 P6,000.00

kg
 132

Burner  Brand: 2 Units 2,500.00 P 5,000.00

(Standard) Standard
 Dual Burner

Cooking Range  Brand: 1 Units 32,699.00 32,699.00

Germania
 4 Burner
 1 Oven

Water Dispenser  Brand: 2 Units 2,150.00 4,300.00

Hanabishi
 Hot
 Cold

Percolator  Brand: 2 Units 5,945.00 11,890.00

Hanabishi
 Capacity: 10
Liters

Juicer  Brand: 1 Unit P1,600.00 P1,600.00

Standard

Blender  Brand: 2 Units 1,200.00 2,400.00

Standard

Refrigerator  Brand: 2 Unit 73,800.00 147,600.00

 133

(Samsung) Samsung
 2 Doors

TOTAL P335,234.00

Note: All kitchen tools and equipment will be purchased at Tiongsan, Baguio City
Except for the regulator and gas tank that can be purchased here in
Bontoc.

Kitchen Supplies

Tools Description No. of Unit Price Total Price

Units
Sponge  Brand: 24 P25.00 P600.00
Scotchbrite pcs

Pot holder  Brand: 12 45.00 540.00

Ovenmate pcs

Table Napkin  Brand: 30 75.00 2,250.00

Hello bags
 134

Sponge Steel Wire  Brand: 12 20.00 240.00

Ball Scotchbrite pcs

Joy Dishwashing  Brand: Joy 12 65.00 780.00

Liquid  Volume: bottle
250 ml s

Soap  Brand: 10 P45.00 P450.00

Safeguard box
 Size: 11.5
grams

Trash Bags(5kls)  Size: Large 200 10.00 2,000.00

pcs

Hair Net  Size: 6 pcs 15.00 90.00

Medium
 135

Apron  Size: 6 pcs 120.00 720.00

Medium

TOTAL P7,670.00

Note: All kitchen supplies will be purchased at Lopez General Merchandise, Bontoc,
Mountain Province.

Maintenance Supplies

Supplies Description No. of Unit Price Total Price

Unit
Safety padlock  Brand: 2 Units P 180.00 P 360.00
Egret
 Size: Large

Soft Broom  Made in 2 Units 135.00 270.00

Tinglayan,
Kalinga

Dipper  Brand: 4 Units 25.00 100.00

Oriental
Plastic
 136

Dustpan  Brand: 2 Units 120.00 240.00

Oriental
Plastic

Speed Mop  Brand: 1 Unit 350.00 350.00

Oriental
Plastic

Dual Step Open  Brand: 2 Units P560.00 P1,120.00

Trash Bin Oriental
Plastic

Trash Bin  Brand: 4 units 150.00 600.00

Oriental
Plastic

Floor Brush  Brand: 2 Units 150.00 300.00

Oriental
Plastic

Dust Cleaner  Brand: 4 Units 35.00 140.00

Oriental
Plastic
 137

Pail Brand: Oriental 4 Units 85.00 340.00

Plastic

Toilet Brush Brand: Oriental 4 Units 65.00 260.00

Plastic

Toilet Cleaner  Brand: 4 units P320.00 P1,280.00

(Domex 1 gal) Domex
 Volume: 1
gal

Rags  Brand: 20 35.00 700.00

JJFCanon Units

Cloth Brush  Brand: 2 Units 55.00 110.00

Oriental
Plastics

Tissue Paper Roll  Brand: 200 10.00 2,000.00

Kleenex rolls

Foot Rag  Size:38 cm 8 Units 105.00 840.00

 138

Toilet Towel  Brand: 16 P35.00 P560.00

JJFCanon Units

Detergent Bar  Brand: 24 25.00 600.00

Tide bars

Note: All maintenance will be purchased at Lopez General Merchandise, Bontoc,

Mountain Province.

Other Assets

Asset Descriptions No. of Unit Price Total Price

Units
Wall clock  Brand: 1 Unit P 525.00 P 525.00
Quartz
 Diameter:
30 cm

Mirror  Size: 138 2 Units 180.00 360.00

cm x 38
cm
 139

LED Chandelier  Brand: FSL 10 P1,300.00 P13,000.00

Lamp  Watts:150 w Units

Aircon (RA-05MB  Brand: 2 Units 11,750.00 23,500.00

Hitachi) Hitachi
 Model: RA-
05mb

Light Box Sign  Size: 115 1 Unit 10,500.00 10,500.00

cm x 50
cm

Sign (No Smoking)  Waterproof 2 Units 105.00 210.00

Sign  Waterproof 2 Units 105.00 210.00

(ComfortRoom)

Fire Extinguisher  Brand: 2 Units 1,500.00 3,000.00

Cyclone

TOTAL P 40,600.00
Note: All other assets will be purchased at Tiongsan, Baguio City except for the
Light Box which will be purchased at Artwork Signs Advertising, 89 Naguilian
Rd. Baguio City; and the signs for ‘No Smoking’ and ‘Comfort Room’ that can be
purchased at Aijay’s Marketing.
 140

Furniture and Fixture

Furniture and Fixture Description No. of Price Total Price

Units
4-seater Dining Set  1 Table 9 Sets P P67,500.00
(Table Top- (L1200x 7,500.00
L1200xW750xT18mm W750xT1
Chair- 8mm)
H935xW400xD495mm)  4 Chairs
(H935xW
400xD49
5mm)

6-Seater Dining Set  1 Table 3 Sets 8,999.00 26,997.00

(Table Top- 33”x57”x30” (33”x57”x
Chair- 30”)
H935xW400xD495mm)  6 Chairs
(H935xW
400xD49
5mm)

Executive Chair  Custom- 1 unit 2,500 . 2,500 .00

made 00
 141

L-Shaped Executive  1 table 1 unit P8,350. P8,350.00

Table (160x120 00
(160x120x75cm) x75cm)

Reception Desk  1 table 1 Unit 7,350.00 7,350.00

 Custom-
Made

Monoblock  Brand: 6 350.00 2,100.00

Uratex Units

Sofa (6x2.5x3.5 ft.)  1 Sofa 1 Unit 8,690.0 8,690.00

(6x2.5x3. 0
5 ft.)
 Designed
for
Manager’
s Office

File Cabinet  5 2 3,250.00 6,500.00

drawers Units
file
cabinet
 Custom-
Made

5 Layer Double Rack  Custom- 2 unit P8,500. P17,000.00

 142

(7x2x5 ft.) Made 00

(7x2x5 ft.)

4 Ft Wall Series Wine  Custom- 2 2,500.00 5,000.00

Rack Made Units

3 Layer Aluminum  Custom- 1 unit 16,200.0 16,200.00

Display Showcase Made 0
(5x2x3.5ft.)  3 layers
(5x2x3.5f
t.)

Kitchen Wall Cabinet  Custom- 4 6,150.00 24,600.00

(4x1.5x2ft) Made Units
(4x1.5x2f
t)

Note: All furniture and fixtures will be purchased at Lusad’s Furniture Shop,
Bontoc, Mountain Province
 143

SCHEDULE OF PURCHASES

Kitchen Supplies (Amounts in Php)

Unit
Cost Total Annual Total
Items Quantity (a) (b) Cost(Quarterly) Cost
Sponge 24 pcs 25.00 600.00 2,400.00
Pot Holder 12 pcs 45.00 540.00 2,160.00
Table Napkin 30 bags 75.00 2,250.00 9,000.00
Sponge Steel Wire Ball 12 pcs 20.00 240.00 960.00
Joy Dishwashing Liquid 12 pcs 65.00 780.00 3,120.00
Soap 10 box 45.00 450.00 1,800.00
Trash Bag 200 pcs 10.00 2,000.00 8,000.00
Hair Net 6 pcs 15.00 90.00 360.00
Apron 6 pcs 120.00 720.00 2,880.00
TOTAL 7,670.00 30,680.00
Note: (1) The Annual Total Cost is computed by Multiplying the Quarterly Total Cost by 4
since all supplies are assumed consumable within three months.
(2) There is no input vat since the supplier is non-VAT registered.

Office Supplies (Amounts in Php)

Quantity Unit Gross Total

Needed Cost Purchases Cost Total Annual
Items Quarterly (a) (b) (axb) Quarterly Cost
Ball pen 1 box 300.00 300.00 300.00 300.00
Columnar Book 2 pcs 25.00 50.00 50.00 200.00
Record Book 1 pc 73.00 73.00 73.00 292.00
General Journal 2 pcs 35.00 70.00 70.00 280.00
Receipt 100 pcs 50.00 5,000.00 5,000.00 5,000.00
General Ledger 2 pcs 35.00 70.00 70.00 280.00
Bond paper 1 rim 165.00 165.00 165.00 660.00
Ink(Tri-color) 1 set 650.00 650.00 650.00 2,600.00
Staple Wire 1 box 150.00 150.00 150.00 600.00
Stamp Pad 1 pc 35.00 35.00 35.00 35.00
Rubber Stamp 1 pc 320.00 320.00 320.00 320.00
Folder 10 pcs 9.00 90.00 70.00 280.00
Calculator 2 units 580.00 1,160.00 1,160.00 1,160.00
Stamp Pad Ink 1 pc 280.00 280.00 280.00 280.00
Scissor 2 pcs 150.00 300.00 300.00 300.00
Swing line
Stapler 1 Pc 380.00 380.00 380.00 380.00
TOTAL 9,093.00 9,073.00 12,976.00
Note:(1) All maintenance will be assumed consumable within 3 months except ballpen,
calculator, receipt and rubber stamp which is consumable more than one year.
(2) The Annual Total Cost is computed by multiplying the Quarterly Total Cost by 4 except
for those supplies which is consumable more than 1 year
(3) There is no Input Vat since the supplier is non-VAT registered.
 144

Maintenance Supplies (Amounts in Php)

Unit Total
Items Quantity (a) Cost (b) Cost(Quarterly) Annual Cost
Safety Padlock 2 pcs 180.00 360.00 360.00
Soft Broom 2 pcs 135.00 270.00 270.00
Dipper 4 pcs 25.00 100.00 100.00
Dust Pan 2 pcs 120.00 240.00 240.00
Speed Mop 1 unit 350.00 350.00 350.00
Dual Step Open Trash
Bin 2 unit 560.00 1,120.00 1,120.00
Trash Bin 4 unit 150.00 600.00 600.00
Floor Brush 4 pcs 150.00 600.00 600.00
Dust Cleaner 4 pcs 35.00 140.00 140.00
Pail 4 pcs 85.00 340.00 340.00
Toilet Brush 4 pcs 65.00 260.00 260.00
Toilet Cleaner 4 pcs 320.00 1,280.00 5,120.00
Rags 10 pcs 35.00 350.00 1,400.00
Cloth Brush 2 pcs 55.00 110.00 440.00
Tissue Paper Roll 100 pcs 10.00 1,000.00 4,000.00
Foot Rag 8 pcs 105.00 840.00 3,360.00
Toilet Towel 16 pcs 35.00 560.00 2,240.00
Tide-Bar 24 pcs 25.00 600.00 2,400.00
TOTAL 9,120.00 23,340.00
Note:(1) All maintenance will be assumed consumable within 3 months except for safety
padlock,soft broom, dustpan, mop, pail, dipper, Dust Cleaner, Floor Brush, Toilet Brush,
Cloth Brush, Glass Cleaning Kit, dual trash bin, and trash bin which is consumable more
than one year.
(2) The Annual Total Cost is computed by Multiplying the Quarterly Total Cost by 4 except
for the supplies that are consumable more than one year.
(3) Salvage Value is 10% of the Total cost and Useful life is based on GAM for NGAS

Office Equipment (Amounts in Php)

Note: (1) Salvage Value is 10% of the Total Cost and Useful life is based on
Government Accounting Manual for National Government Agencies (GAM for NGAS)
(2) Yearly Depreciation is computed as:
(Gross Amount – Salvage Value) / Useful Life
 145

Example: Yearly Depreciation (Computer) = (P25,650– P2, 565)/5 =P4,617.00

Kitchen Tools and Equipment (Amounts in Php)

Note: (1) Salvage Value is 10% of the Total cost and Useful life is based on GAM for
NGAS
(2) Yearly Depreciation is computed as: (Total Cost – Salvage Value) / Useful
Life
Example: Yearly Depreciation (Water Dispenser)=(P2,150 – P4,300)//5=P860.00
 146

Furniture and Fixture (Amounts in Php)

Yearly
Quantity Unit Cost Salvage Useful Dep'n
Items (a) (b) Total Cost Value Life Expense
4 seater Dining
Set 9 sets 7,500.00 67,500.00 6,750.00 10.00 6,075.00
6 Seater Dining
Set 3 sets 8,800.00 26,400.00 2,640.00 10.00 2,376.00
Executive Chair 1 unit 2,500.00 2,500.00 250.00 5.00 450.00
Executive Table 1 unit 8,350.00 8,350.00 835.00 10.00 751.50
Reception Desk 1 unit 7,350.00 7,350.00 735.00 10.00 661.50
Uratex Monoblock 6 pcs 350.00 2,100.00 210.00 5.00 378.00
Sofa 1 unit 8,690.00 8,690.00 869.00 10.00 782.10
File Cabinet 2 unit 3,250.00 6,500.00 650.00 10.00 585.00

5 Layer Double
Rack 2 unit 8,500.00 17,000.00 1,700.00 10.00 1,530.00
4 Feet Wall series
Wine Rack 2 unit 2,500.00 5,000.00 500.00 10.00 450.00
3 Layer Aluminum
Display Showcase 1 unit 16,200.00 16,200.00 1,620.00 10.00 1,458.00
Kitchen Wall
Cabinet 4 unit 6,150.00 24,600.00 2,460.00 10.00 2,214.00
TOTAL 192,190.00 19,219.00 17,711.10
Note: (1) Salvage Value is 10% of the Total cost and Useful life is based on GAM for NGAS
(2) Yearly Depreciation is computed as: (Total Cost – Salvage Value) / Useful Life
Example: Yearly Depreciation (sofa) = (P8,690– P869)/10
=P782.1

Other Assets (Amounts in Php)

Yearly
Quantity UnitCost Salvage Useful Dep'n
Items (a) (b) Total Cost Value Life Expense
Fire Extinguisher 1 unit 1,500.00 1,500.00 150.00 5.00 270.00
Wall Clock 1 unit 525.00 525.00 52.50 3.00 157.50
Mirror 2 unit 180.00 360.00 36.00 5.00 64.80
LED Chandelier
Lamp 3 unit 1,300.00 3,900.00 390.00 5.00 702.00
Aircon 2 unit 11,750.00 23,500.00 2,350.00 10.00 2,115.00
Light Box Sign 1 unit 10,500.00 10,500.00 1,050.00 5.00 1,890.00
Sign-No Smoking 1 pcs 105.00 105.00 10.50 2.00 47.25
Sign-Comfort
Room 2 pcs 105.00 210.00 21.00 2.00 94.50
TOTAL 40,600.00 4,060.00 5,341.05

Note: (1) Salvage Value is 10% of the Total cost and Useful life is based on GAM for NGAS
(2) Yearly Depreciation is computed as: (Total Cost – Salvage Value) / Useful Life
 147

Example:Yearly Depreciation (Wall Clock) = (P525– P52.50)/3 = P157.50

COST OF SALE OF MEALS
Combination 1-Kidney Bean Salad

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.
 148

(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P5.00
overhead added

Combination 2- Mushroom Omelet

 149

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.
(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14 overhead
added.

Combination 3-Beefy Mushroom

 150

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14 overhead added.

Combination 4-Vege Meat Sisig

 151

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine
Statistic Authority.

(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14
overhead added.

Combination 5-Vege Meat Curry

 152

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.
(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14 overhead added.

Combination 6- Caesar Salad

 153

Note: (1) Total cost per serving is increased every year by the 5-year moving average
inflation rate from 2020-2024 provided by the Philippine Statistic Authority.
(2) Overhead is computed based on the actual overhead costing used by Health
100 Ecolodge wherein for every P50 cost of direct materials, there should be P14
overhead added.

Budget Meal 1-Vege Meat

 154

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14
overhead added.

Budget Meal 2-Chicken Breast

 155

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.
(2) Overhead is computed based on the actual overhead costing used by Health 100
Ecolodge wherein for every P50 cost of direct materials, there should be P14 overhead added.

COST OF SALES OF BEVERAGES

Pure Carrot Juice

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.
(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Pure Cucumber Juice

 156

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of operating
days per year

Carrot Apple Juice

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

2)Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Carrot Apple Cucumber Juice

 157

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority

(2 Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Cucumber Celery Juice

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Lemon Grass Iced Tea

 158

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Turmeric Tea

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year

Arabica Coffee
 159

Note: (1) Total cost per serving is increased every year by the 5-year moving average inflation
rate from 2020-2024 provided by the Philippine Statistic Authority.

(2) Total Annual Cost is computed by: Total Daily cost x No. of daily serving x No. of
operating days per year.

Summary of Annual Cost of Meals

Note: The table above shows the summary of cost of sales of the meals for years
2020,2021,2022,2023 and 2024.

Summary of Annual Cost of Beverages

Note: The table above shows the summary of cost of sales of the beverages for years
2020,2021,2022,2023 and 202
 160

APPENDIX M:

Cost of Electricity

Cost of Electricity per Month

No. of
Consump
No. of Watts Usage Watts/ Consumption
Particulars tion/Day
Item /Item Hours/ Day /Month
(kwh)
Day
Computer 1 80 10 800 0.8 24.00
Printer 1 15 1 15 0.015 0.45
Television 1 150 24 3600 3.6 108.00
Surveillance Camera 1 60 24 1440 1.44 43.20
Globe Broadband
Router 1 6 10 60 0.06 1.80
Rice Cooker 2 730 10 14600 14.6 438.00
Percolator 2 600 10 12000 12 360.00
Juicer 1 325 10 3250 3.25 97.50
Blender 1 200 10 2000 2 60.00
Refrigerator 2 150 24 7200 7.2 216.00
LED Chandelier Lamp 3 150 10 4500 4.5 135.00
Aircon 2 318 10 6360 6.36 190.80
Light Box Sign 1 10 4 40 0.04 1.20
TOTAL 1,675.95

Cost of Electricity per Year (All amounts in Php)

  2020 2021 2022 2023 2024
Total Kilowatt per
Month 20,111.40 20,726.81 21,348.61 21,989.07 22,648.74
Multiply by
Average Energy
Rate 10.147025 10.147025 10.147025 10.147025 10.147025
Consumption per 204,070.8 210,315.4 216,624.9 223,123.6 229,817.3
Month 8 5 1 6 7
Add: Fixed Charge
per Month 60.00 60.00 60.00 60.00 60.00
Total
Consumption Per
Month before 204,130.8 210,375.4 216,684.9 223,183.6 229,877.3
VAT 8 5 1 6 7

Less: Input VAT 21,871.17 22,540.23 23,216.24 23,912.53 24,629.72

Total
Consumption Per 182,259.7 187,835.2 193,468.6 199,271.1 205,247.6
Month Net of VAT 1 2 7 2 5
 161

APPENDIX N:

SSS CONTRIBUTION SCHEDULE

PhilHealth Contribution Table

SSS, PhilHealth and HDMF Computations

 162

Holiday Pay Computations

Salary/Honorarium Computations

Computation of Taxes
163
 164

Job Description and Qualifications

 165

APPENDIX O:

Chart of Accounts
ASSETS
Current Assets
101 Cash and Cash Equivalents
102 Inventory
103 Kitchen Supplies
104 Office Supplies
105 Maintenance Supplies
Non-Current Assets
106 Kitchen Tools and Equipment (net)
107 Office Equipment (net)
108 Furniture and Fixtures (net)
109 Other Assets (net)
LIABILITIES
Current Liabilities
201 SSS, PhilHealth and HDMF Premiums Payable
202 Withholding Tax Payable
203 Income Tax Payable
204 VAT Payable
205 Salaries Payable
Partner's Equity
301 Rubilyn, Capital
302 Reynaldo Jr., Capital
303 Franklin, Capital
304 Fredie, Capital
305 Gladys, Capital
Revenue
401 Revenue
402 Interest Income
Expenses
501 Kitchen Supplies Expense
502 Office Supplies Expense
503 Maintenance Supplies Expense
504 Salaries Expense
505 Advertising Expense
506 Rent Expense
507 Withholding Tax Expense
508 Taxes and Licenses
509 Repairs and Maintenance
510 Uniform Allowance Expense
511 Utilities Expense
512 Feasibility Cost
513 Recruitment Expense
514 Income Tax Expense
515 Depreciation Expense- Kitchen Tools
516 Depreciation Expense- Kitchen Equipment
517 Depreciation Expense- Office Equipment
518 Depreciation Expense- Furniture and Fixtures
519 Depreciation Expense- Machineries and Equipment
520 Depreciation Expense- Leasehold Improvements
521 Depreciation Expense- Other Assets
 166

522 SSS, PhilHealth and HDMF Premiums Expense

Description of the chart of accounts were presented below;

1) Cash and Cash Equivalents

 Refer to cash on hand, cash in bank and highly liquid investments that

are readily convertible into cash.

2) Inventory

 Assets that are held for sale in the ordinary course of business.

3) Kitchen Supplies

 Supplies used in the kitchen such as table napkins, hair net, apron and

others.

4) Office Supplies

 Refers to supplies used inside the office like record books, calculator,

ink, bond paper and others.

5) Maintenance Supplies

 Refer to supplies used to maintain the cleanliness of the facility such

trash bin, dustpan, soft broom and others.

6) Kitchen Tools and Equipment

 Refers to tools and equipment used inside the kitchen like burners,

utensils and others.

7) Office Equipment

 Equipment that are used in operating inside the office.

8) Furniture and Fixture

 Refers to tangible assets that are used as decors inside the business

like painting, lighting fixtures, tables and chairs.

 167

9) Other Assets

 Refer to assets that cannot be categorized under kitchen tools and

equipment, office equipment and furniture and fixture.

10) SSS, PhilHealth and HDMF Premiums Payable

 Refers to the withheld part of the salaries of the employees that is yet

to be remitted to the authorized agents.

11) Withholding Tax Payable

 This represents the portion of rent that was withheld by the business to

be payable to the Bureau of Internal Revenue.

12) Income Tax Payable

 Obligation of the business to be paid to the Bureau of Internal Revenue

as a percentage of the net income of the business.

13) VAT Payable

 Refers to the part of payment paid by the customers which will be paid

or remitted to the Bureau of Internal Revenue.

14) Salaries Payable

 Refers to the salaries of the employees that is to be paid by the

business.

15) Partner’s Capital

 Refers to the investment of the partners which represents the residual

interest in the assets of the partnership. Partners’ capital is then

increased by the net income and decreased by partner’s withdrawal.

 168

16) Revenue

 Increases in economic benefits during the accounting period in the

form of inflows that results in the increase in equity.

17) Interest Income

 Revenue earned from lending money specially to a bank.

18) Kitchen Supplies Expense

 Refers to the cost of kitchen supplies used during the current

accounting period.

19) Office Supplies Expense

 Refers to the cost of office supplies used during the current accounting

period.

20) Maintenance Supplies Expense

 Refers to the cost of maintenance supplies used during the current

accounting period.

21) Salaries Expense

 Compensation or remuneration in whatever form given to employees

for the services they render to the business.

22) Advertising Expense

 Refers to cost of publications on newspapers, television, and other

cost of promoting the business.

23) Rent Expense

 Refers to charges on the right to occupy a space or enjoy the use of

other properties or assets.

 169

24) Withholding Tax Expense

 Refer to the amount withheld by the business which was then remitted

to the Bureau of Internal Revenue.

25) Taxes and Licenses

 Refer to business taxes, licenses, and other fees due to the

government.

26) Repairs and Maintenance

 Cost of repairing and servicing certain assets like building, machineries

and equipment.

27) Uniform Allowance Expense

 Refer to the cost of providing uniforms to the employees of the

business.

28) Utilities Expense

 Refers to the cost of electricity and water consumed during the current

accounting period.

29) Feasibility Cost

 Cost of conducting a study to determine the feasibility or viability of a

proposed business.

30) Recruitment Expense

 Refer to the cost of hiring employees to be employed by the business.

31) Income Tax Expense

 Refers to the income tax which is to be paid to the government.

32) Depreciation Expense

 170

 Portion of the total cost of fixed assets allocated to current operations.

33) SSS, PhilHealth, and HDMF Premiums Expense

 Refers to the withheld part of the salary employees that was already

remitted to authorized agents or establishment.

 171

APPENDIX P:

Going Healthy

Notes to Projected Financial Statement

For Periods Ending December 31, 2020, 2021, 2022, 2023 and 2024

Note 1 – General Information

Going Healthy was a partnership primarily engaged in the provision of

food services to the community of Central Bontoc, Mountain Province and will

formally start its operation on January 2020. The business was registered with

the Bureau of Internal Revenue (BIR) as a VAT enterprise.

The business’s office will be located at the basement of Kedawen

Building, Poblacion, Bontoc, Mountain Province.

The calendar year was used by the proposed business as its operating

time frame and would operate on a cash basis method.

The financial statements have been prepared in compliance with

Philippine Reporting Standards for Small and Medium-sized Entities issued by

Philippine Financial Reporting Standards Council.

Note 2 – Cash and Cash Equivalents

This account is composed of Cash on Hand and Cash in Bank as shown

in the table below. Cash equivalents are short-term, highly liquid investments that
 172

are readily convertible to known amounts of cash with original maturities of three

months or less and are subject to significant risk of changes in value.

Cash and Cash Equivalents

The cash and cash equivalents include cash on hand and cash in bank.

Cash and cash equivalents are increasing every year due to the increase of cash

inflows from the business operation. The proposed business will invest its cash in

time deposit. By doing so, cash would be utilized resulting to higher return.

Note 3 – Inventories

During the pre-operation (2019), there was no beginning inventory.

Inventories were only purchased during the operation of the business considering

that the inventories of the business are perishable. The ending inventories as

shown is increasing since the numbers of customer every year are increasing.

Note 4 – Kitchen Supplies

 173

Kitchen supplies used for the first quarter of year 2020 were purchased

during the pre-operation (2019). The values were increasing since the numbers

of customer were increasing.

Note 5: Office Supplies

Office supplies used for the first quarter of year 2020 were purchased

during the pre-operation (2019). The values were increasing since the numbers

of customer were increasing.

Note 6: Maintenance Supplies

Maintenance supplies used for the first quarter of year 2020 were

purchased during the pre-operation (2019). The values were increasing since the

numbers of customer were increasing.

Note 7: Creditable Input VAT

 174

The creditable input VAT was derived from the input VAT paid during the

purchase of tools and equipment from a VAT registered supplier- Tiongsan,

Baguio City. There was no input VAT for the following years since there was no

additional purchase of equipment within the five-year projection. In addition, the

minimum life of our tools and equipment is five (5) years.

Note 8: Kitchen Tools and Equipment (net)

Kitchen tools and equipment were purchase during the pre-operation

(2019). It is shown that its values are decreasing since the business’ kitchen

tools and equipments are depreciating. The kitchen tools and equipment were

depreciated using the straight-line method.In addition, there are no additional

purchase of kitchen tools and equipment during the five year projection since the

minimum life of the business’ kitchen tools and equipment is five (5) years.

Note 9: Office Equipment (net)

Office equipment were purchase during the pre-operation (2019). It is

shown that its values are decreasing since the business’ office equipment are

depreciating. The kitchen tools and equipment were depreciated using the

straight-line method In addition, there are no additional purchase of office

 175

equipment during the five year projection since the minimum life of the business’

office equipment is five (5) years.

Note 10: Furniture and Fixture (net)

Furniture and fixture were purchased during the pre-operation (2019). It is

shown that its values are decreasing since the business’ furniture and fixture are

depreciating. The furniture and fixture were depreciated using the straight-line

method. In addition, there are no additional purchase of furniture and fixture

during the five year projection since the minimum life of the business’ furniture

and fixture is ten (10) years.

Note 11: Other Assets (net)

Other assets were purchase during the pre-operation (2019). It is shown

that its values are decreasing since the business’ other assets are depreciating.

The other assets were depreciated using the straight-line method In addition,

there are no additional purchase of other assets during the five year projection

since the minimum life of the business’ other assets is five (5) years.
 176

Notes 12: SSS, PhilHealth and HDMF Premiums Payable

There was no SSS, Philhealth and HDMF premiums payable during the

pre-0peration (2019) since the business did not employ any regular employee

during the period. Employees were expected to report on the commencement of

the business operation (2020). The SSS, Philhealth and HDMF premiums

payable was steady during the five-year projection since there was no salary

increase or decrease during the said period.

Note 13: Salaries Payable

There was no salaries payable during the pre-operation (2019) since

the employees would report on the commencement of the business operation

(2020). The salaries payable is steady since there is no salary increase during

the first five years of business operation.

Note 14: Withholding Tax Payable

 177

Withholding tax was derived from the rent expense incurred. Withholding

taxes are filed every quarter to the BIR. As shown in the table, withholding tax for

the pre-operation (2019) is P3, 000.00 which was 5% of the last quarter’s rent

expense during the year 2019 and it follows for the next five years. The

withholding tax payable is stable since the rent expense did not increase during

the said period.

Note 15: Income Tax Payable

There was no income tax payable during the pre-operation (2019) since

the commencement of the business was on January of year 2020. As shown in

the table, the income tax payable is decreasing even though the net income

before tax is increasing since the tax rate for the next five years is decreasing by

one percent (1%).

Note 16: VAT Payable

 178

During the pre-operation, there was no VAT payable since the business

incurred a loss. Further, for the next five years the VAT payable in increasing due

to the proportional increase in sales.

Note 17: Total Revenue

There was no revenue during the pre-operation since the business

commences its operation on January of year 2020. The total revenue was

increasing since the number of customers for the next five years is increasing.

Total revenue was computed by deducting the output VAT (which was computed

by multiplying the gross sale by the quotient of 12/112) by the gross sales.

Note 18: Interest Income

The table showed the interest income for 5 years. Starting 2021, interest

income continued to increase as cash in bank increases for the succeeding

years. Cash in bank was divided by 2 to get the average cash in bank and then

multiplied by 1% which was the banks interest rate.

Note 19: Cost of Sales

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There was no revenue during the pre-operation since the business

commences its operation on January of year 2020. As shown in the table, the

cost of sales was increasing due to the proportional increase in number of

customers for the said period.

Note 20: Kitchen Supplies Expense

As shown in the table, pre-operation has no kitchen supplies expense as

the business did not start operation at that time. Kitchen supplies expense

remains constant due to the fact that throughout the year the business consumed

the same amount of supplies. Although prices of supplies tend to increase and

decrease, this does not affect the price as there were low variations on the

prices.

Note 21: Office Supplies Expense

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As shown in the table, pre-operation has no office supplies expense as the

business did not start operation at that time. Office supplies expense remains

constant due to the fact that throughout the year the business consumed the

same amount of supplies. Although prices of supplies tend to increase and

decrease, this does not affect the price as there were low variations on the

prices.

Note 22: Maintenance Supplies Expense

As shown in the table, pre-operation has no maintenance supplies

expense as the business did not start operation at that time. Maintenance

supplies expense remains constant due to the fact that throughout the year the

business consumed the same amount of supplies. Although prices of supplies

tend to increase and decrease, this does not affect the price as there were low

variations on the prices.

Note 23: Salaries Expense

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The table showed that in the pre-operation, there was no salaries expense

because the business did not start operation. It showed that the salaries expense

was constant because the rate for each employee was fixed. A way to motivate

employees was through the provisions of 13th month pay.

Note 24: SSS, PhilHealth and HDMF Expense

There was no SSS, PhilHealth and HDMF expense during the pre-

operation (2019) since the employees would report on the commencement of the

business operation (2020). The table shows that the SSS, PhilHealth and HDMF

expense is stable since the salaries as basis for the computation of SSS,

PhilHealth and HDMF expense did not change.

Note 25: Depreciation - Kitchen Tools and Equipment

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Straight line method of depreciation was used in depreciating kitchen tools

and equipment. That was why in the table, the amount of depreciation was the

same throughout the year. Salvage value of such assets was computed as a

10% of the initial cost net of VAT. Kitchen tools and equipment has a 5-year and

10-year useful life.

Note 26: Depreciation - Office Equipment

Straight line method of depreciation was used in depreciating office

equipment. That was why in the table, the amount of depreciation was the same

throughout the year. Salvage value of such assets was computed as a 10% of

the initial cost net of VAT. Office equipment has a 5-year useful life.

Note 27: Depreciation - Furniture and Fixture

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Straight line method of depreciation was used in computing the

depreciation of furniture and fixture. That was why in the table, the amount of

depreciation was the same throughout the year. Salvage value of such assets

was computed as a 10% of the initial cost net of VAT. Furniture and fixture has a

10-year useful life.

Note 28: Depreciation - Other Assets

Straight line method of depreciation was used in computing the

depreciation for other assets. That was why in the table, the amount of

depreciation was the same throughout the year. Salvage value of such assets
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was computed as a 10% of the initial cost net of VAT. Other assets have a 5-year

and 10-year useful life.

Note 29: Repairs and Maintenance

Pre-operation did not have a repairs and maintenance expense because

operation did not start at that time. From the table, the total repairs and

maintenance continue to increase by 10%.

Note 30: Advertising Expense

The table showed that the proposed business did advertise only during the

pre-operation of the business. The business thinks that after advertising during

pre-operation, the customers were the one now to advertise through word of

mouth.

Note 31: Rent Expense

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Note 30: Rent Expense

Pre-Operation 2020 2021 2022 2023 2024
Monthly Rent Expense 21,000.00 21,000.00 21,000.00 21,000.00 21,000.00 21,000.00
Multiply by: No. of Months 3 12 12 12 12 12
Annual Rent Expense 63,000.00 252,000.00 252,000.00 252,000.00 252,000.00 252,000.00

As per contract of lease, payment of rent began on the last quarter of

2019. Rent expense per month is P20, 000.00. The table shows that the rent

expense is stable since there is no rent increase during the next five years.

Note 32: Taxes and Licenses

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The table showed that the business paid the same amount for registration

and regulatory fees for 5 years to the Local Government.

Note 33: Uniform Allowance Expense

The table showed that the proposed business provided uniform allowance

to its employees during pre-operation only. Employees received a pair of 3

uniforms.

Note 34: Utilities Expense

The proposed business payment for electricity continued to increase because the

kilowatt consumption per year continued to increase as well.

Note 35: Feasibility Cost

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Feasibility cost was incurred only during pre-operation because it was this

time the study about the viability of the business was conducted.

Note 36: Recruitment Expense

Recruitment was conducted only during the pre-operation. Unless such

employed individual was terminated due to some valid reasons.

Note 37: Income Tax Expense

The table showed that the proposed business income tax rate

continued to decrease; it is because of the provisions of the TRAIN Law (RA

10963). It could be inferred that the net income continued to increase slowly and

the income tax rate decreases by 1% every year that was why the income tax

expense decreased.
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APPENDIX Q:

Location Map of the Proposed Business

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APPENDIX R:

Definition of Terms

Accounting Equation – is a fundamental balance sheet equation that identifies

the relationships between the elements of accounting such as liabilities plus

capital equates to assets.

Accounting Period – an established range of time during which accounting

functions are performed, aggregated, and analyzed including a calendar year or

fiscal year.

Ambiance – it refers to the atmosphere or mood of the business establishment.

Cost of Living Allowances (COLA) – a money received by personnel in

addition to normal pay to cover the increased in the cost of living.

Cultural Structure - refers to the spiritual aspect of social structure emphasizing

human relationships.

Disbursement – the payment of money to a third party. A payment can be made

directly by the entity that has the obligation to pay or the payment can be made

on behalf of the principal by an agent such as an attorney.

Entrepreneurial Skills – a combine range of technical, management and

personal skills.

Good Agricultural Practices (GAP) – a collection of principles to apply for on-

farm production and post-production processes resulting in safe and healthy

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foods and non-food agricultural products, while taking into account the economic,

social and environmental sustainability.

Healthy Foods – refers to health foods such as natural foods, organic foods or

vegetarian foods or dietary supplements. Also, foods that are low in fat, saturated

fats and contains limited amounts or no amounts of cholesterol and sodium.

Healthy Habits – is any behavior that benefits your physical, mental, and

emotional health. A habit that improves the overall well-being and make you feel

good.

Healthy Lifestyle – is one which helps to keep and improve people’s health and

well-being.

Hypertension – a medical condition in which constricted arterial blood vessels

increase the resistance to blood flow, causing an increase in blood pressure

against vessel walls.

Legal Liabilities – describes a situation in which a small business is held legally

responsible for injuring or financially harming another party that can result in

fines, penalties or other payments.

Organic – it refers to production of food without the use of chemical fertilizers,

pesticides or other artificial agents.

Personnel – refers to the regular employees of the business establishment.

Pricing Strategy – a way of finding a competitive price of a product or a service.

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Suki – a buddy system of doing business in the Philippines, wherein a customer

buys certain products from a particular vendor, who in turn offers discounts and

other perks for such exclusivity.

Vegan – a strict vegetarian who consumes no food such as meat, eggs or dairy

products that comes from animals.