NOEL B. TUTOR (St.

Anthonys Gas Station)

NOTES TO FINANCIAL STATEMENTS

1. Taxpayer’s Information

NOEL B. TUTOR, the taxpayer, owns and manages St. Anthonys Gas Station. The enterprise is
engaged in the retail of automotive fuel and gasolines.

The registered address of the establishment is at Poblacion, Candijay , Bohol. The business entity
was registered in BIR on June 10, 2020.

2. Basis of Preparation

The financial statements are prepared for submission to the Bureau of Internal Revenue.

The accompanying financial statements have been prepared under the historical cost basis and are
presented in Philippine peso, which is the Company’s functional and presentation currency under
Philippine Financial Reporting Standards (PFRS).

Statement of Compliance
The accompanying financial statements have been prepared in compliance with PFRS. PFRS
includes statements named PFRS and Philippine Accounting Standards (PAS) issued by the
Financial Reporting Standards Council.

3. Significant Accounting Judgments, Estimates and Assumptions

Judgments
In the process of applying the Company’s accounting policies, management has made the
following judgments, apart from those involving estimations, which have the most significant
effect on the amounts recognized in the financial statements.

Use of Estimates and Assumptions

The key assumptions that may have significant risks of causing material adjustments to the
carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimated Useful Life of Property and Equipment. The useful life of the Property and Equipment
is estimated based on the period over which the asset is expected to be available for use. Such
estimation is based on a collective assessment of industry practice and experience with similar
assets. The estimated useful life of the asset is reviewed periodically and updated if expectations
differ from previous estimates due to physical wear and tear, technical commercial obsolescence
and legal or other limitations on the use of the asset. It is possible, however, that future results of
operations could be materially affected by changes in the amounts and timing of recorded
expenses brought about by changes in the factors mentioned above. A reduction in the estimated
useful life would increase the recorded operating expenses and decrease Property and Equipment.

All items of property and equipment have been depreciated on straight line basis.
4. Summary of Significant Accounting and Financial Reporting Policies

Cash
Cash includes cash on hand and in bank. Cash equivalents, if there is any, are short term, highly
liquid investments that are readily convertible to known amounts of cash with original maturities
of three months or less from dates of placement and that are subject to insignificant risk in change
in value.

Merchandise Inventory
Merchandise Inventory is carried at its cost. Cost includes the acquisition or purchase price
plus freight in.

Property and Equipment

Property and Equipment is stated at cost less accumulated depreciation and any impairment in
value.

The initial cost of Property and Equipment consists of its purchase price, including import duties,
if there is any, taxes and any directly attributable cost of bringing the asset to its working
condition and location for its intended use. Expenditures incurred after the transportation
equipment have been put into operation, such as repairs and maintenance and overhaul costs, are
normally charged to income in the period the costs are incurred. In situations where it can be
clearly demonstrated that the expenditures have resulted in an increase in the future economic
benefits expected to be obtained from the use of an item of office equipment beyond its originally
assessed standard of performance, the expenditures are capitalized as an additional cost of
property and equipment.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.

Equity
Capital is determined using the nominal value of proprietor’s net worth.

Revenue Recognition
Revenue is recognized to the extent that it is probable that economic benefits will flow to the
Company and the income can be reliably measured. The following specific recognition criteria
must also be met before income is recognized:

Revenue is measured by reference to the fair value of consideration received or receivable by the
Company for goods supplied and services provided, excluding value added tax (VAT) and trade
discounts, if there is any.

Expense Recognition
Related costs and expenses are recognized as incurred. These are recognized in the statement of
comprehensive income upon utilization of the service or goods at the date of their origin.
Finance costs are reported on an accrual basis.

Contingencies
Contingent liabilities are not recognized in the financial statements. They are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote.
5. Property and Equipment

2023 2022
Cost
Temporary Structures 1 400,000.00 400,000.00
Temporary Structures 2 300,000.00 300,000.00
Land Improvements 1 700,000.00 700,000.00
Land Improvements 2 600,000.00 600,000.00
Delivery Equipment 550,000.00 550,000.00
Tools and Other Equipment 100,000.00 100,000.00
Furniture and Fixtures 50,000.00 50,000.00
2,700,000.00 2,700,000.00
Accumulated Depreciation
Temporary Structures 1 70,000.00 50,000.00
Temporary Structures 2 52,500.00 37,500.00
Delivery Equipment 128,333.34 91,666.67
Tools and Other Equipment 35,000.00 25,000.00
Furniture and Fixtures 17,500.00 12,500.00

303,333.34 216,666.67
Net Book Value 2,396,666.66 2,483,333.33

__________________________________________________________________________________
6. Supplementary Tax Information

The following is a list of taxes and licenses paid by the taxpayer during the year:

2023 2022
LGU Fees and other permits 24,921.50 25,117.00
Community Tax Certificate 105 105
BIR Annual Registration Fee 500 500
Total 25,526.50 25,722.00
_________________________________________________________________________________
7. Income Tax Computation

Below is the income tax computation of the taxpayer:

Taxable Income 805,200.00

Income tax for the first 800,000.00 102,500.00

Excess of 800,000 multiplied by 25% 1,300.00
Income tax due 103,800.00
Less:
Income Tax Paid for the first 3 quarters 1,258.00
Creditable Tax withheld for the first 3 quarters 52,403.00
Creditable Tax withheld for the fourth quarter 48,020.04
Income tax still due 2,119