Republic of the Philippines

BILIRAN PROVINCE STATE UNIVERSITY

(formerly NAVAL STATE UNIVERSITY)
ISO 9001:2015 CERTIFIED

SCHOOL OF TECHNOLOGY AND COMPUTER STUDIES

Bachelor of Science in Industrial Technology
First Semester, SY 2022-2023

Case Study Analysis

Presented to
Miss. Etheljane C. Ybañez

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In Partial Fulfillment
Of the Midterm Project for the
Basic Accounting 1

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(NAME OF STUDENT)

(STATE THE DATE YOU SUBMIT YOUR PROJECT)

 CASE STUDY ANALYSIS
INSTRUCTION: The cases presented below are practical applications of the princi-
ples being discussed. Support your answer in every cases with the applicable princi-
ples.

Case 1

Mr. Ragnar Lothbrok acquired his business for P5,000,000. The fair market value of the
business is P6,000,000.

Will it be more useful if accounting records were adjusted corresponding to the fair market
value amount of the business? Justify your answer.

Answer:
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Case 2:

Assuming that you are the accountant of the Electric Servicing Company. For the period,
the company received an advance payment from Mr. X (once of the company’s client who
have contract with him to render electric services for 3 month) amounted to P1,200,000 ap-
plicable for 3 months from December of 2021 to February of 2022.

In the income statement, you reported only a service income of 400,000 for the period ended
December 31, 2021.

The owner of the Electric Servicing Company is questioning the accuracy and relevance of
your report because you did not include as income the P 800,000 income for January and
February 2022. The owner insisted that the correct reportable income should be P1,200,000
because it is what Mr. X paid the company.

What would be your explanation to the owner?

Answer:
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Case 3:
During the period the business acquires an equipment costing P200,000 in cash. The busi-
ness owner is questioning why you, as his accountant/bookkeeper did not include the
P200,000 equipment as one of the items of operating expense in the income statement
which resulted in a higher income tax of the business.

How would you explain it to the owner?

Answer:
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Case 4:

Based on the Case No. 4, the owner of the business is also questioning your inconsistency
in treating items of operating expenses in the financial statements.

The P200,000 equipment was not expensed outrightly and the purchase of calculator
amounting to P150,000 was expensed immediately. Both of the items are used in the busi-
ness,

How would you explain the inconsistency?

Answer:
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Case 5:

The owner of the business is questioning why the electric and water bills consumed by his
family which was paid from cash of the business are charged to his personal drawing. He is
claiming that since he is the owner of the business, he has the discretion to the use of the
business cash.

How would you explain your accounting for such payment?

Answer:
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