Professional Documents
Culture Documents
Financial Statements
Financial Statements
PROBLEM #1
The amounts of (a) the assets and liabilities of Val Financial Consultants at December 31, 20X4
and (b) the revenue and expenses of the company for the year ended on that date follow. The
items are listed in alphabetical order.
The capital balance of Val Santos, the owner, was P64,500 at December 31, 20X3. During 20X4,
Val withdrew P48,000 for personal use.
Instructions:
1. Prepare the income statement of Val Financial Consultants for the year ended
December 31, 20X4.
2. Prepare the company’s statement of owner’s equity for the year ended December 31,
20X4.
3. Prepare the company’s balance sheet at December 31, 20X4.
4. Answer these questions about the company:
4.1 Was the result of operations for the year a profit or a loss? How much?
4.2 Did Val drain off all the earnings for the year, or did he increase the company’s
capital during the period? How much in total economic resources does the
company have as it moves into the new year? How much does the company
owe? What is the amount of Val’s equity interest at the end of the year?