Case

Tegar decided to create a company engaged in the Car Wash franchise b

1-Jan Tegar deposited his money into a company account amounting to 128 m
2-Jan Tegar to buy all the necessities of car wash tools such as hydraulic jack, s
Tegar also buys the supplies that will be used in the car wash and spent 8
3-Jan Then he rented a space to be used as a car wash for 50 million
He recruited 5 employees with a salary of 2.5 million which was paid at t
15-Jan Due to high customer enthusiasm, the company was short on supplies. T
16-Jan Tegar pays 5 million to have advertising brochures and posters printed. H
29-Jan Tegar pay all the employee salaries
31-Jan Company's profit was 77 million at the end of the month

Chart Of Accounts

1001 Cash
1002 Accounts Receivable
1003 Supplies
1004 Prepaid Insurance
1010 Equipment
1011 Accumuated Depreciation - Equipment
2001 Accounts Payable
2002 Interest Payable
2003 Unearned Service Revenue
2004 Notes Payable

General Journal

Trans. Description Reff

1-Jan Cash 1001
Share Capital-Ordinary 3001
 2-Jan Equipment 1010
Cash 3001

2-Jan Supplies 1003

Cash 1001

3-Jan Rent Expenses 5006

Cash 1001

15-Jan Supplies 1003

Cash 1001

16-Jan Advertising Expense 5002

Cash 1001

29-Jan Salaries Expense 5007

Cash 1001

30-Jan Cash 1001

Sales Revenue 4001

Trial Balance

Madjoe Jaya Wash

Trial Balance
31-Jan-21

Cash
Equipment
Share Capital - Ordinary
Supplies
Rent Expense
Advertising Expense
Salaries Expense
Sales Revenue
Total

Adjustment

30-Jan Tegar plans to register insurance on its company, he pays 12 million for o
30-Jan Tegar estimates that the depreciation of his car wash equipment is 0,3%
30-Jan Tegar also plans to buys the supplies that will be used in the car wash an

29-Jan Prepaid Insurance 1004

Cash 1001

30-Jan Depreciation Expense 5004

Acc. Depreciation Equipment 1011

Adjusted Trial Balance

Madjoe Jaya Wash
Adjusted Trial Balance
31-Jan-21

Cash
Equipment
Share Capital - Ordinary
Supplies
Rent Expense
Advertising Expense
Salaries Expense
Sales Revenue
Prepaid Insurance
Depreciation Expense
Accumulated Depreciation Equipment
Total
Income Statement
Madjoe Jaya Wash
Income Statement
31-Jan-21

Revenue
Sales Revenue
Revenue
Rent Expense
Advertising Expense
Salaries Expense
Depreciation Expense

Total Expense
Net Income

Retained Earnings Statement

Madjoe Jaya Wash
Retained Earnings Statement
January , 2021
Retained earnings, January 1
Add : Nett Income
Less: Dividends
Retained earnings, February 31

Statement of Financial position

Madjoe Jaya Wash
Statement of Financial position
January , 2021

Assets
Property, plant, and equipment
Equipment
Acc Depreciation- Equipment
Current Assets
Prepaid Insurance
Supplies
Cash
Total Current Assets
Total Assets

Equity and Liabilities

Equity
Share Capital - Ordinary
Retained Earning
Non Current Liabilities

Current Liabilities
Total Liabilities
Total Equity and Liabilities

Closing Entries

Date Description
31-Jan Sales Revenue
Income Summary

Income Summary
Rent Expense
Advertising Expense
Salaries Expense
Depreciation Expense

Income Summary
Retaining Earnings
Post Closing Trial Balance
Madjoe Jaya Wash
Post Closing Trial Balance
January , 2021

Cash
Equipment
Supplies
Prepaid Insurance
Share Capital - Ordinary
Accumulated Depreciation Equipment
Retaining Earnings
n the Car Wash franchise business. He plans to open his first outlet as a pilot outlet

count amounting to 128 million

ols such as hydraulic jack, sprayer, vacum cleaner others for 60 million
in the car wash and spent 8 million for the needs including , car wax, car soap and others
sh for 50 million
million which was paid at the end of each month and started his business
ny was short on supplies. Then he buy again supplies that needed until the end of the month amounting t
ures and posters printed. He plans to distribute these as opportunities arise.

the month

3001 Share Capital - Ordinary 5007 Salaries Expense

3002 Retained Earnings
3003 Dividends
4001 Sales Revenue
5001 Utilities Expense
5002 Advertising Expense
5003 Supplies Expenses
5004 Depreciation Expense
5005 Interest expense
5006 Rent Expenses

Ledger

Cash
1-Jan IDR128,000,000
Dr Cr 2-Jan
IDR128,000,000 1-Jan
IDR128,000,000 2-Jan
 15-Jan
IDR60,000,000 16-Jan
IDR60,000,000 28-Jan
30-Jan IDR77,000,000
IDR8,000,000 IDR57,500,000
IDR8,000,000
Equipment
IDR50,000,000 1-Jan IDR60,000,000
IDR50,000,000 IDR60,000,000

IDR12,000,000 Share Capital Ordinary

IDR12,000,000 31-Dec

IDR5,000,000
IDR5,000,000 Supplies
1-Jan IDR8,000,000
IDR12,500,000 14-Jan IDR12,000,000
IDR12,500,000 IDR20,000,000

IDR77,000,000 Rent Expenses

IDR77,000,000 2-Jan IDR50,000,000
IDR50,000,000

Advertising Expense
15-Jan IDR5,000,000
IDR5,000,000

Salaries Expense
28-Jan IDR12,500,000
Debit Credit IDR12,500,000
IDR57,500,000
IDR60,000,000 Sales Revenue
IDR128,000,000 30-Jan
IDR20,000,000
IDR50,000,000
IDR5,000,000
IDR12,500,000
IDR77,000,000
 IDR205,000,000 IDR205,000,000

ny, he pays 12 million for one-year insurance policy that will start on Feb 1, 2021
ar wash equipment is 0,3% per month
be used in the car wash and spent 20 million for the needs of one month including , car wax, car soap and

IDR12,000,000
IDR12,000,000

IDR180,000
IDR180,000

Debit Credit
IDR45,500,000
IDR60,000,000
IDR128,000,000
IDR20,000,000
IDR50,000,000
IDR5,000,000
IDR12,500,000
IDR77,000,000
IDR12,000,000
IDR180,000
IDR180,000
IDR205,180,000 IDR205,180,000
 IDR77,000,000

IDR50,000,000
IDR5,000,000
IDR12,500,000
IDR180,000

IDR67,680,000
IDR9,320,000

IDR9,320,000

IDR9,320,000
 IDR60,000,000
IDR180,000 IDR59,820,000

IDR12,000,000
IDR20,000,000
IDR45,500,000
IDR77,500,000
IDR137,320,000

IDR128,000,000
IDR9,320,000
IDR137,320,000

0
IDR137,320,000

Dr Cr
IDR77,000,000
IDR77,000,000

IDR67,680,000
IDR50,000,000
IDR5,000,000
IDR12,500,000
IDR180,000

IDR9,320,000
IDR9,320,000
Debit Credit
IDR45,500,000
IDR60,000,000
IDR20,000,000
IDR12,000,000
IDR128,000,000
IDR180,000
IDR9,320,000

IDR137,500,000 IDR137,500,000
he month amounting to 12 million

1001

IDR60,000,000
IDR8,000,000
IDR50,000,000
 IDR12,000,000
IDR5,000,000
IDR12,500,000

1010

1010
IDR128,000,000
IDR128,000,000

1003

5006

5002

5007

4001
IDR77,000,000
IDR77,000,000
car wax, car soap and others
 LUO INC.
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2014

Investment $ 640,000 Share Capital Ordinary $ 1,450,000

Equipment $ 1,720,000 Retained earnings $ 330,000
Land $ 265,000 Long term notes payable $ 960,000
Accounts Receiveable $ 160,000 Accounts Payable $ 380,000
Inventory $ 185,000
Cash $ 150,000

$ 3,120,000 $ 3,120,000

Net Income for 2015 was $ 535,000

Accounts Receiveable was $ 142,000
Inventory was $ 100,000
Investment was $ 420,000
Accounts Payable was $ 340,000

1 a. Gain on sale of investment was $ ……. $ 198,000

b. Decrease in ordinary shares was $ ……. $ 332,000
c. Paid dividends was $ …… $ 278,000
d. Purchase land was $ ….. $ 189,000
e. Depreciation expense of equipment of 10%
f. Increase long-term notes payable was $ ……… $ 449,000
2 LUO INC.
STATEMENT OF CASH FLOW
DECEMBER 31, 2015

Cash Flows from operating Activities

Net Income
Adjustment To Reconcile net income to
Net Cash provided by operating activities
Depreciation Expense
Gain on sale of investments
Decrease in inventory
Decrease in accounts payable
Decrease in accounts recievable
Net cash Provided by operating activities

Cash flows from investing activities

Sale of investment
Purchase of Land
Net cash used by investing activities

Cash flows from financing activities

Issuance of ordinary shares
payment of cash dividends
Net cash provided by financing activities

Net increase in cash

Cash at beginning of years
Cash at end of years

3 LUO INC.
Retained Earnings
DECEMBER 31, 2015

Retained earnings,
Add : Nett Income
Less: Dividends
Retained earnings,
 4 LUO INC.
STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2015

Assets
Current Assets
Cash
Investment
Account Recievable
Inventory
Total Current Asset

Non Current Assets

Land
Equipment
Less Accumulated Depreciation - Equipment
Total Non Current Assets
Total Asset

Equity and Liabilities

Equity
Share Capital- Ordinary
Retained Earnings
Total Equity

Non Crrent Liabilities

Notes Payable
Current Liabilities
Account Payable
Total Liabilities

Total Equity and Liabilities

5a.
Nett Cash Provided by operating activities $ 572,000
Less : Purchase Land $ 189,000
 Dividend $ (278,000)
Free Cash Flow $ 483,000

Company doesn’t have difficulties on the financial

so they can purchase additional investment

5b. Current Cash Debt Coverage Ratio

Net Cash Provided by Operating

Average Current Liabilities

$ 572,000
$ 340,000

= 1.68235294
This means the cash LUO INC generated through its operating activities
that can be used to repay 1,682 times its average current liabilities.
This result also means that the company has performed exceptionally
well in generating cash flow from operations or keeping its current liabilities to
a minimum.
 $ 535,000

$ 172,000
$ (198,000)
$ 85,000
$ (40,000)
$ 18,000 $ 37,000
$ 572,000

$ 220,000
$ 189,000
$ 31,000

$ 332,000
$ (278,000)
$ 54,000

$ 657,000
$ 150,000
$ 807,000

$ 330,000
$ 535,000
$ (278,000)
$ 587,000
 $ 807,000
$ 420,000
$ 142,000
$ 100,000
$ 1,469,000

$ 454,000
$ 1,720,000
$ 172,000 $ 1,548,000
$ 2,002,000
$ 3,471,000

$ 1,118,000
$ 587,000
$ 1,705,000

$ 1,409,000

$ 340,000
$ 1,749,000

$ 3,454,000
ent liabilities to