Losa, Marinella A.

BSA-3A
CHAPTER 5

PROBLEM #1 A) ₱ 2,500,000

Current assets
Net plant and equipment

Total Assets

Current liabilities
Long-Term debts
Total Common Equity

Total Liabilities and Equity

B) ₱ 500,000

Total assets = Current assets + Net plant and equipment ₱2,500,000 =

Current assets = ₱2,500,000 – ₱2,000,000 Current assets = ₱500,000

C) ₱ 250,000
Total liabilities and equity = Current liabilities + Long-term debt + To
₱2,500,000 = Current liabilities + ₱750,000 + ₱1,500,000 ₱2,500,000

Current liabilities = ₱2,500,000 – ₱2,250,000 Current liabilities = ₱25

D) ₱ 100,000

Current liabilities = Accounts payable and accruals + Notes payable ₱

Accounts payable and accruals = ₱250,000 – ₱150,000
Accounts payable and accruals = ₱100,000
 E) ₱ 250,000

Net working capital = Current assets – Current liabilities Net working

Net working capital = ₱250,000

F) ₱ 400,000

f. Net operating working capital = Current assets – (Current liabilities

Net operating working capital = ₱500,000 – (250,000 – ₱150,000) Ne

PROBLEM #3 A) ₱ 15.50

Total assets
Current liabilities
Long-term liabilities
Stockholders’ equity
Preferred stock
Net worth assigned to common

Common shares outstanding

Book value (net worth) per share

B) ₱ 2,400

Earnings available to common

Shares outstanding
Earnings per share

P/E ratio x Earnings per share = Price

15x₱1.60 =₱2400

C) ₱ 1.55
 Market value per share (price) to Book value per share
₱24.00 ÷ ₱15.50 = 1.55

D) 19.375

2 x Book value per share = Price

2 x ₱15.50 = ₱31.00

Price

Earnings per share

₱31.00 /₱1.60

19.375 P/E ratio

PROBLEM #5 A) ₱ 75,600

Sales ₱700,000
Cost of goods sold (70% of sales)
Gross profit
Selling and administrative expense (12% of sales)
Depreciation
Operating profit
Interest expense
Earnings before taxes
TAXES @ 30%
Earnings after taxes

B) Ms.. Lim's idea will increase profitability

Sales
Cost of goods sold (66% of sales)
Gross profit
 Selling and administrative expense (14% of sales)
Depreciation Operating profit
Operating profit
Interest expense
Earnings before taxes
Taxes @ 30%
Earnings after taxes

PROBLEM #7 A)

Sales
Cost of goods sold (60%)
Gross Profit
Selling and administrative expense
Depreciation expense (8%)
Operating profit
Interest expense
Earnings before taxes
Taxes (20%)
Earnings after taxes
Dividends
Earnings available to common stockholder
Shares outstanding
Earnings per share

B)

Retained earnings balance, Jan. 1, 2011

Add: Earnings available to common
stockholders, 2011
Deduct: Cash dividend declared in 2011
 Retained earnings balance, Dec. 31, 2012

C)

For the year ended December 31, 20x5

Current assets:
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Non-current Assets:
Gross plant
Accumulated depreciation
Total non-current assets
Total assets

Liabilities:
Accounts payable
Notes payable
Bonds payable
Total liabilities
Owners’ equity:
Common stock
Paid in capital in excess of par
Retained earnings
Total equity
Total liabilities and equity

PROBLEM #9 A)
Cash
Accounts receivable
Land
Barns and sheds
Citrus trees Livestock
Irrigation system
Farm machinery Fences and gates
Total assets

Liabilities:
Notes payable
Accounts payable
Property taxes payable
Wages payable
Total liabilities Owners’ equity:
Share capital
Retained earnings*
Total liabilities and equity
 ₱ 500,000
₱ 2,000,000

₱ 2,500,000

₱ 250,000
₱ 750,000
₱ 1,500,000

₱ 2,500,000

assets + Net plant and equipment ₱2,500,000 = Current assets + ₱2,000,000

00,000 – ₱2,000,000 Current assets = ₱500,000

quity = Current liabilities + Long-term debt + Total common equity

liabilities + ₱750,000 + ₱1,500,000 ₱2,500,000 = Current liabilities + ₱2,250,000

2,500,000 – ₱2,250,000 Current liabilities = ₱250,000

ccounts payable and accruals + Notes payable ₱250,000 = Accounts payable and accruals + ₱150,000
accruals = ₱250,000 – ₱150,000
accruals = ₱100,000
 Current assets – Current liabilities Net working capital = ₱500,000 – ₱250,000
₱250,000

ng capital = Current assets – (Current liabilities – Notes payable)

g capital = ₱500,000 – (250,000 – ₱150,000) Net operating working capital = ₱400,000

₱ 800,000
₱ 150,000
₱ 120,000
₱ 530,000
₱ 65,000
₱ 465,000

30000

₱ 15.50

₱ 48,000
₱ 30,000
₱ 1.60

er share = Price
e (price) to Book value per share

are = Price

P/E

₱ 700,000
0% of sales) ₱ 490,000
210,00
ative expense (12% of sales) ₱ 84,000
₱ 10,000
₱ 116,000
₱ 8,000
₱ 108,000
₱ 32,400
₱ 75,600

ncrease profitability

₱ 750,000
6% of sales) ₱ 495,000
₱ 255,000
ative expense (14% of sales) ₱ 105,000
₱ 10,000
140 000
₱ 15,000
₱ 125,000
₱ 37,500
₱ 875,000

Shadow Corporation
Income Statement
For the year ended 20X5

₱ 220,000
₱ 132,000
₱ 88,000
ative expense ₱ 22,000
₱ 20,000
₱ 46,000
₱ 8,000
₱ 380,000
₱ 7,600
₱ 30,400
₱ 2,000
common stockholder ₱ 24,800
₱ 10,000
₱ 2.84

Shadow Corporation
Statement of Retained Earnings
For the year ended 20x5

ance, Jan. 1, 2011 ₱ 80,000

e to common
₱ 28,400
d declared in 2011 ₱ 8,400
ance, Dec. 31, 2012 ₱ 100,000

Shadow Corporation
Statement of Financial Position
For the year ended December 31, 20x5
Assets

₱ 10,000
₱ 16,500
₱ 27,500
₱ 12,000
₱ 66,000

₱ 285,000
₱ (70,000)
₱ 215,000
₱ 281,000

Liabilities and Owners’ equity

₱ 15,000
₱ 26,000
₱ 40,000
₱ 81,000

₱ 75,000
₱ 25,000
₱ 100,000
₱ 200,000
₱ 281,000

SM Farms
Statement of financial Position
 September 30, 20x5
Assets
16710

Liabilities and Owners’ equity