Josue, John Carlo C.

The Entrepreneurial Mind

BSBA 2.1A 07_Activity_1

P-M-I CHART
Instruction: Respond to the scenario below by using the P-M-I Chart. Write your
answers in the spaces provided. (20 points)

• In the Interesting box, write some facts about the specific financial statement.
Scenario: Shark Loans received a request for a construction loan from Wendy Services
Inc. This construction loan will be used to build their fifth branch in Pasay. The
company submitted its balance sheet and income statement. Help Shark Loans choose
which financial statement they would use as a basis on whether they will accept or
reject Wendy Services Inc.'s request. Refer to Page 2. Justify your decision.
Response 1: Statement of Financial Position

Plus Minus

Here we may observe the company's
annual revenue. Profit and gains have been
demonstrated.
This shows the company's earnings, which
are as follows: The Wendy Services Inc.
earned 651, 990.00 in 2019 and 514,745.00
in 2020. And the sum of their liabilities and
owner's equity equals their asset. This
means that the company is already
bankrupt as a result of their loans.

Interesting

They are still gaining, but their service business does not have any assets that
can be used to pay if they are ever able to lend.
 Response 2: Income Statement

Plus Minus

Wendy's services include both income In terms of financial, the income

and expenses. Their financial statement
shows the net income for the entire year,
indicating whether there is a profit or
loss.
statement looks the same since they
earned service revenue of 90,000 in
2019 and the service revenue of
60,000 in 2020. Then, concentrate on
their net sales as they got 550,000 in
2019, but they only got 250,000 in the
year of 2020. This means that the
year 2020 is diminishing.

Interesting

Using the financial statement of Wendy Services Inc., we will see the net income
that they earn for the year.

WENDY SERVICES INC.

Balance Sheet
December 31

200A 200B

Assets
Cash 166,320.00 332,640.00
Accounts Receivable 119,350.00 59,675.00
Office Supplies 5,775.00 5,775.00
Prepaid Insurance 15,400.00 15,400.00
Office Equipment 261,800.00 300,000.00
Accumulated Depreciation 53,900.00 207,900.00 61,500.00 238,500.00
Total Assets ₱514,745.00 ₱651,990.00
Liabilities and Owner's Equity

Accounts Payable ₱53,900.00 ₱107,800.00

Salary Payable 9,240.00 9,240.00
Unearned Revenue 23,100.00 27,800.00

Total Liabilities ₱86,240.00 ₱144,840.00

B. Sia-Ko, Capital 428,505.00 507,150.00

Total Liabilities and Owner's Equity ₱514,745.00 ₱651,990.00

WENDY SERVICES INC.

Income Statement
December 31

200A 200B
Revenue:
Service Revenue ₱600,000.00 ₱900,000.00
Expenses:
Equipment rental expense ₱200,000.00 ₱200,000.00
Wages expense ₱90,000.00 ₱90,000.00

Utility expense ₱60,000.00 ₱60,000.00

Total expenses ₱350,000.00 ₱350,000.00
Net Income ₱250,000.00 ₱550,000.00