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Entrep 4th
Entrep 4th
Entrep 4th
ASSETS LIABILITIES
Problem
1. ON January 1, 2019. Mr. Ace and Mrs. Jelly Smith started the JellyAce Cakes
and Pastries-Cafe Business and invested 5,000,000.
2. January 3, 2019. Mr. Ace went to the Davao City Business Permit and Licensing
Office and paid 5,000 for business registration. Mrs. Jelly, on the other hand,
went to the Department of Trade and Industry and paid 500 for the DTI permit.
3. January 4, 2019. Mr. and Mrs. Smith purchased Baking Equipment needed in the
Cakes and Pastries. They paid 60,500 in cash. They also bought a freezer worth
55,000 in cash. These pieces of equipment are expected to last for eight years,
and the straight line of depreciation will be used to compute its net book value.
4. January 5, 2019. To support the starting capital expenditures of the business, Mr.
and Mrs. Smith applied for a bank loan last December 2018 and was approved
and released on 4 January 2019. The loan amounting to 300,000 is payable in
three years with an 10% interest per annum.
5. January 5, 2019. The couple also purchased a motorcycle worth 75,000 and a
Minivan worth 550,000. The motorcycle and the Minivan were purchased on
account and are payable for one year. They were given a special installment plan
by the dealer and will pay zero percent interest for 12 months starting 8 February
2019. The expected life of both the motorcycle and delivery van is five years and
will be fully depreciated thereafter. Straight line depreciation will be applied at the
end of every calendar year.
6. January 7, 2019. Ace hired eight people for the business-three for the
manufacturing of the products, and five for the Cakes and Pastries-Cafe with
respective monthly salaries of 10,000 each. They are also required to have
mandatory 13th month pay and SSS benefits worth 5,350 each per year. Their
official start date is 7 January 2019, and will have their first payroll paid on 20
January 2019. Their monthly salary will be paid in two installments, every 20th
and every 5th of the month.
7. January 15, 2019. The couple bought all the items needed for their Cakes and
Pastries and public market stall as follows:
35 chairs 15,000
6 tables 10,000
Food Storage Container 5,000
Utensils 3,500
Flatware 10,000
Pots and Pan 2,000
The pieces of equipment for the Cakes and Pastries are expected to last for four
years. Straight line depreciation will also be applied
8. January 16, 2019. with the assistance of Mr. and Mrs. Ace, the manufacturing
staff members started manufacturing Cakes and Pastries. They bought bulk
ingredients in cash from the Market. They were able to initially produce 100 pcs
of Cupcakes/Cookies, and they expected to sell these in two to three days. Per
computation of Mr. and Mrs. Ace, the cost per piece of Cupcakes/Cookies, which
has about 16 pieces, is 170.
11. 1 January to 31 December 2019. Ace was able to produce additional 15,000
Cupcakes/Cookies for the whole year to supply their stall, Cafe, and delivery
service.
Other inventories for the mini-restaurant business cost 900,000. Coffee, sugar,
cream, soft drinks, and purified water.
Sales Report Quantity Sales Gross Cost per Total Cost
Sold Price pc of Sales
Sales
per pc
Cupcakes/Cookies: Stall 2560 230 588,800 170 435,200
Cupcakes/Cookies: Cafe 3500 230 805,000 170 595,000
Cupcakes/Cookies: Delivery 1580 230 363,400 170 268,600
Service
Coffee (per cup) 6,000 40 240,000 20 120,000
Soft drinks and purifies water (per 6,000 30 180,000 20 120,000
bottle)
Total 19,640 2,177,200 1,538,800