Problem 1

Income Statement
for 2 months transaction

Dr. Cr.

Sales 190,000

Cost of Good Sold 155,000

Commision Expense 5,700

G and A Expenses 10,700 171,400

Net Income 18,600

Problem 2. Unadj. TB Adjustment Adj. TB INCOME STATEMENT BALANCE SHEET
Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr.
Cash 77,900 1,000 76,900 76,900 0
A/R 127,400 127,400 127,400 -
Merchandise Inv. 903,200 593,900 309,300 309,300 -
Supplies Inv. 17,450 13,150 4,300 4,300 -
Store Equipment 71,000 71,000 71,000 -
Accu.Depn - Store Equipment 10,650 592 11,242 0 11,242
Prepaid Insurance 13,550 6,500 7,050 7,050 -
Accounts Payable 89,000 89,000 89,000
Notes Payable 80,000 80,000 80,000
Common Stock 100,000 100,000 100,000
Retained Earnings 34,000 34,000 34,000
Sales 989,000 989,000 0 989,000
Sales Discount 3,350 3,350 3,350 0
Interest Expense 8,500 2,000 10,500 10,500 0
SSS Contribution Expense 3,400 3,400 3,400 0
Utilities Expense 18,950 18,950 18,950 0
Selling Expense 10,800 10,800 10,800 0
Salaries Expense 47,150 1,900 49,050 49,050 0
TOTAL 1,302,650 1,302,650 - 0
Cost of Good Sold 593,900 593,900 593,900 0
Depreciation Expense 592 592 592 0
Supplies Expense 13,150 13,150 13,150 0
Insurance Expense 6,500 6,500 6,500 0
Accrued Interest 2,000 2,000 - 2,000
Accrued Salaries 1,900 1,900 - 1,900
Bank Service Charges 1,000 1,000 1,000 0
Grand TOTAL 619,042 619,042 1,307,142 1,307,142 711,192 992,900 595,950 314,242
Profit 281,708 281,708
992,900 992,900 595,950 595,950

Problem 3

ASSET
S Liabilitites & Stockholders' Equity
 P100,50
Cash P37,500 Accounts Payable 0
Account Receivable (net) P69,500 Income TaPayable P 37,500
P100,00 P150,00
Inventory 0 Long term debt 0
P441,00 P450,00
Plant and Equipment (net) 0 Common Stock 0
Retained earnings -90,000
P648,00 P648,00
TOTAL 0 Total 0

Problem 4

Net income 790,000

Depreciaiton Expense 250,000 (600,000-350,000)
Inventory -80,000
AP Decrease -5,000
Gain on Sale of LT -35,000
Net Operation Cash Flow 920,000

Investment
(700,000 + 600,000-
Purchase of P & E 1,190,000 110,000)
Short term investmetn increase -300,000
Sale of LT investment -135,000
Sale on Building 350,000
Net Investmet Cash Flow 1,975,000

Financing
Dividend Paid 340,000 (500,000-160,000)
CS Issuance 220,000 (10,000 x 22)
Short term debt income 325,000
Net Financing Cash Flow 205,000

Net Cash Flow 120,000

Cash Beg 200,00
Cash End P 320,000