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) ₱ 24

Earnings available to common

Shares outstanding
Earnings per share

P/E ratio x Earnings per share = Price

15x₱1.60 =₱24

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

b) The loss of an asset due to typhoon will decrease the total assets. Whi

PROBLEM #11 A)

Cash
Accounts receivable
Supplies
Land
Building
 Furniture and Fixtures
Total assets

Liabilities:
Notes payable
Accounts payable
Total liabilities
Owners’ equity:
Share capital
Retained earnings*
Total liabilities and equity

b)

Cash
Accounts receivable
Supplies
Land
Building
Furniture and Fixtures
Total assets

Liabilities:
Notes payable
Accounts payable
Total liabilities
Owners’ equity:
Share capital
Retained earnings*
Total liabilities and equity
 Revenues
Expenses
Net income

Cash flows from operating activities:

Cash received from revenues
Cash paid for expenses
Cash paid for accounts payables
Cash for paid supplies
Cash used in operating activities

Cash flows from investing activities: None

None

Cash flows from financing activities:

Cash received from sale of share capital

Increase in Cash
Cash Balance, October 1, 20x5
Cash Balance, October 6, 20x5

c) The First Malt Shop is weaker during september 30 because the comp
 ₱ 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
₱ 16,710.00
₱ 22,365.00
₱ 550,000.00
₱ 78,300.00
₱ 76,650.00
₱ 120,780.00
₱ 20,125.00
₱ 42,970.00
₱ 33,570.00
₱ 961,470.00
Liabilities and Owners’ equity

₱ 530,000.00
₱ 77,095.00
₱ 9,135.00
₱ 1,820.00
₱ 618,050.00

₱ 250,000.00
₱ 93,420.00
₱ 961,470.00

ue to typhoon will decrease the total assets. Which may affect also the balances of liabilities and equity, wich reflects on the retai

The First Malt Shop

Statement of financial Position
September 30, 20x5
Assets
₱ 7,400.00
₱ 1,250.00
₱ 3,440.00
₱ 55,000.00
₱ 45,500.00
 ₱ 20,000.00
₱ 132,590.00
Liabilities and Owners’ equity

₱ 70,000.00
₱ 8,500.00
₱ 78,500.00

₱ 50,000.00
₱ 4,090.00
₱ 132,590.00

The First Malt Shop

Statement of financial Position
October 6, 20x5
Assets
₱ 29,400.00
₱ 1,250.00
₱ 4,440.00
₱ 55,000.00
₱ 45,500.00
₱ 38,000.00
₱ 173,590.00
Liabilities and Owners’ equity

₱ 70,000.00
₱ 18,000.00
₱ 88,000.00

₱ 80,000.00
₱ 5,590.00
₱ 173,590.00
 The First Malt Shop
Income Statement
For the Period October 1-6 20x5

₱ 5,500.00
₱ (4,000.00)
₱ 1,500.00

The First Malt Shop

Statement of Cash Flows
For the Period October 1-6 20x5

ng activities:
₱ 5,500.00
₱ (4,000.00)
nts payables ₱ (8,500.00)
₱ (1,000.00)
used in operating activities ₱ (8,000.00)

ng activities: None

ng activities:
sale of share capital ₱ 30,000.00

₱ 22,000.00
₱ 7,400.00
₱ 29,400.00

s weaker during september 30 because the company had a highly liquid assets the cash and accounts receivable. While on octobe
 ₱ -
equity, wich reflects on the retained earnigs account. Both totals amounting P23,800.00.
ounts receivable. While on october 6 there is an additional investment of cash happened that is why it is more stronger
hy it is more stronger