Problem #12

Prepare the Financial Statements.

The accounts for the balance sheet, statement of changes in equity, and income statement of
Marife Sarmiento, CPA, are as follows;

Accounts Payable ₱ 63,500

Accounts Receivable 198,000
Accumulated Depreciation- Building 110,000
Accumulated Depreciation- Office Equipment 120,000
Auditing Revenues 1,361,500
Building 750,000
Cash 118,500
Depreciation Expense Building 55,000
Depreciation Expense- Office Equipment 60,000
Sarmiento, Capital, 1/1/2012 1,193,500
Sarmiento, Withdrawals 165,000
Land 75,000
Notes Receivable 60,000
Office Equipment 362,000
Office Supplies Expenses 96,000
Office Supplies 28,000
Professional Development Expense 86,500
Rent Expense 52,500
Salaries Expense 735,000
Salaries Payable 30,500
Travel Expense 41,000
Utilities Expense 18,000

During the year, Sarmiento invested additional P22,000 in the business.

Required:
Prepare the income statement, statement of changes in equity and balance sheet.
 Marife Sarmiento, CPA
Income Statement
For the Year Ended December 31, 2012

Auditing Revenues ₱ 1,361,500

Less: Operating Expenses
Depreciation Expense – Building ₱ 55,000
Depreciation Expense – Office Equipment 60,000
Office Supplies Expense 96,000
Professional Development Expense 86,500
Rent Expense 52,500
Salaries Expense 735,000
Travel Expense 41,000
Utilities Expense 18,000
Total Expenses ₱ 1,144,000 ₱
1,361,500
Net Income ₱ ​217,500

Marife Sarmiento, CPA

Statement of Changes In Equity
For the Year Ended December 31, 2012

Sarmiento, Capital, Jan. 1, 2012 ₱1,193,500

Add:
Additional Investment ₱22,000
Net Income 217,500 2​ 39,500
Total 1,433,000
Less: Withdrawals 165,000
Sarmiento, Capital, Dec. 1, 2012 1,268,000
 Marife Sarmiento, CPA
Balance Sheet
As of December 31, 2012

Assets
Current Assets
Cash ₱118,500
Accounts Receivables 198,000
Notes Receivables 60,000
Office Supplies 28,000

Total Current Assets ₱404,500

Non-Current Assets
Land ₱ 75,000
Building 750,000
Accumulated Depreciation – Building (110,000) 640,000
Office Equipment 362,500
Accumulated Depreciation – Office Equipment (120,000) 242,500

Total Non-Current Assets 957,500

Total Assets ₱​ 1,360,000

Liabilities
Current Liabilities
Accounts Payable ₱63,500
Salaries Payable 30,500

Total Liabilities ​₱ 94,000

OWNERS EQUITY
Sarmiento, Capital ₱1,268,000

Total Liabilities & Owner`s Equity ​ ₱1,362,000