Intermediate Accounting Volume 3 Valix

MASAY COMPANY Statement of Cost of Goods Manufactured Year Ended December 31, 2020 Raw materials, Jan. 1 Purchases Raw materials available for use Raw materials, Dec. 31 Raw materials used Direct labor Factory overhead Indirect labor Superintendence Light, heat and power Rent – factory building Repair and maintenance – building Depreciation – machinery Factory supplies used Total manufacturing cost Goods in process, Jan. 1 Total cost of goods put to process Goods in process, Dec. 31 Cost of goods manufactured

₱200,000.00 ₱3,000,000.00 ₱3,200,000.00 (₱280,000.00) ₱2,920,000.00 ₱950,000.00 ₱250,000.00 ₱210,000.00 ₱320,000.00 ₱120,000.00 ₱50,000.00 ₱60,000.00 ₱110,000.00

₱1,120,000.00 ₱4,990,000.00 ₱240,000.00 ₱5,230,000.00 (₱170,000.00) ₱5,060,000.00

Cost of Good Sold Method MASAY COMPANY Income Statement For the Year Ended December 31, 2020 Net sales Cost of goods sold Gross income Other income Total income Expense Distribution cost Administrative expenses Earthquake loss Income before tax Income expense (30% x P7,500,000) Income after tax (loss)

₱7,450,000.00 (₱5,120,000.00) ₱2,330,000.00 ₱210,000.00 ₱2,540,000.00 ₱830,000.00 ₱590,000.00 ₱300,000.00

Note 1 – Net Sales Sales Sales Returns and Allowances Net sales Note 2 – Cost of Goods Sold Finished goods, Jan. 1

₱7,500,000.00 (₱50,000.00) ₱7,450,000.00

₱360,000.00

(₱1,720,000.00) ₱820,000.00 (₱2,250,000.00) (₱1,430,000.00)

Cost of goods manufactured Goods available for sale Finished goods, Dec. 31 Cost of goods sold

₱5,060,000.00 ₱5,420,000.00 (₱300,000.00) ₱5,120,000.00

Note 3 – Other Income Gain on sale of equipment Gains from expropriation Interest income Total other income

₱100,000.00 ₱100,000.00 ₱10,000.00 ₱210,000.00

Note 4 – Distribution costs Sales salaries Advertising Depreciation – store equipment Delivery expense Net purchases

₱400,000.00 ₱160,000.00 ₱70,000.00 ₱200,000.00 ₱830,000.00

Note 5 – Administrative Expenses Office salaries Depreciation – office equipment Accounting and legal fees Office expenses Total administration expenses

₱150,000.00 ₱40,000.00 ₱150,000.00 ₱250,000.00 ₱590,000.00

Note 6 – Other Expense Earthquake loss Total other expense

₱300,000.00 ₱300,000.00

Nature of Expense Method MASAY COMPANY Income Statement For the Year Ended December 31, 2020 Net sales Other income Total income Expenses Decrease in inventory Raw materials Direct labor Factory overhead Salaries Advertising Depreciation Delivery expenses Accounting and legal fees Earthquake loss

₱7,450,000.00 ₱210,000.00 ₱7,660,000.00 ₱130,000.00 ₱2,920,000.00 ₱950,000.00 ₱1,120,000.00 ₱550,000.00 ₱160,000.00 ₱110,000.00 ₱200,000.00 ₱150,000.00 ₱300,000.00

Office expenses Income before tax Income tax expense Loss after tax

₱250,000.00

(₱6,840,000.00) ₱820,000.00 (₱2,250,000.00) (₱1,430,000.00)

Note 1 – Net Sales Sales Sales returns and allowances Net sales Note 2 – Other Income Gain on sale of equipment Gains from expropriation Interest income Total other income

Beginning

₱7,500,000.00 (₱50,000.00) ₱7,450,000.00

₱100,000.00 ₱100,000.00 ₱10,000.00 ₱210,000.00

Note 3 – Decrease in Finished Goods and Goods in Process End Decrease ₱360,000.00 ₱300,000.00 ₱60,000.00 ₱240,000.00 ₱170,000.00 ₱70,000.00 ₱600,000.00 ₱470,000.00 ₱130,000.00

Note 4 – Raw Materials Used Raw materials, beg. Purchases Raw materailas available for use Raw materials, end. Raw materials used

₱200,000.00 ₱3,000,000.00 ₱3,200,000.00 (₱280,000.00) ₱2,920,000.00

Note 5 – Factory Overhead Indirect labor Superintendence Light, heat and power Rent – factory building Repair and maintenance – building Depreciation – machinery Factory supplies used Total factory overhead

₱250,000.00 ₱210,000.00 ₱320,000.00 ₱120,000.00 ₱50,000.00 ₱60,000.00 ₱110,000.00 ₱1,120,000.00

Note 6 – Salaries Sales salaries Office salaries Total salaries

₱400,000.00 ₱150,000.00 ₱550,000.00

Note 7 – Depreciation Depreciation – store equipment Depreciation – office equipment Total depreciation

₱70,000.00 ₱40,000.00 ₱110,000.00

Note 8 – Other Expense Earthquake loss Total other expense

₱300,000.00 ₱300,000.00

BERNA COMPANY Income Statement For the Year Ended December 31, 2020 Sales (P1,000,000 / 25%) Cost of goods sold (45% x P4,000,000) Gross income Expenses (30% x P4,000,000) Net income

₱4,000,000.00 (₱1,800,000.00) ₱2,200,000.00 (₱1,200,000.00) ₱1,000,000.00

Cost of goods sold (150% x 30%) Net income (100% - 45% - 30%) Purchases (P1,500,000 / 75) Raw materials, Dec. 31 Raw materials used (50% x P3,000,000) Direct labor (30% x P3,000,000) Factory overhead (20% x P3,000,000) Total manufacturing costs Goods in process, Dec. 31 (1/3 x P2,250,000) Cost of goods manufactured Finished goods, Dec. 31 (25% x P1,800,000) Cost of goods sold

45.00% 25.00% ₱2,000,000.00 (₱500,000.00) ₱1,500,000.00 ₱900,000.00 ₱600,000.00 ₱3,000,000.00 (₱750,000.00) ₱2,250,000.00 (₱450,000.00) ₱1,800,000.00

BERNA COMPANY Statement of Financial Position December 31, 2020 ASSETS Current assets Cash Accounts receivable (10% x P4,000,000) Inventories Total current assets Non current assets Property, pant and equipment Total non current assets Total assets LIABILITIES Accounts payable (25% x P2,000,000) Total liabilities

₱500,000.00 ₱400,000.00 ₱1,700,000.00 ₱2,600,000.00

₱2,900,000.00 ₱2,900,000.00 ₱5,500,000.00

₱500,000.00 ₱500,000.00

EQUITY Common stock, P100 par Additional paid-in capital Retained earnings Total equity Total liabilities and equity Note 1 – Inventories Raw materials, Dec. 31 Goods in process, Dec. 31 (1/3 x P2,250,000) Finished goods, Dec. 31 (25% x P1,800,000) Total

₱2,500,000.00 ₱1,500,000.00 ₱1,000,000.00 ₱5,000,000.00 ₱5,500,000.00

₱500,000.00 ₱750,000.00 ₱450,000.00 ₱1,700,000.00

Note 2 – Property, Plant and Equipment Total cost ₱3,000,000.00 Accumulated depreciation (₱100,000.00) Carrying amount ₱2,900,000.00

ROSE COMPANY Statement of Comprehensive Income December 31, 2020 Dividend income from investments Distribution income from trusts Interest income on deposits Income from bank treasury bills Income from dealing in securities and derivatives held for trading, net Other income Total income Expenses Administrative staff costs Sundry administrative costs Finance cost Income becore tax Income tax expense Net income Other comprehensive income to be reclassified to profit of loss Unrealized gain on forward contract designated as cash flow hedge Comprehensive income

₱9,200,000.00 ₱500,000.00 ₱700,000.00 ₱100,000.00 ₱450,000.00 ₱250,000.00 ₱11,200,000.00 ₱3,800,000.00 ₱1,200,000.00 ₱300,000.00

₱400,000.00 ₱4,600,000.00

RELIABLE COMPANY Statement of Retained Earnings Year Ended December 31, 2020 Retained earnings, Jan. 1

(₱5,300,000.00) ₱5,900,000.00 (₱1,700,000.00) ₱4,200,000.00

₱200,000.00

Overdepreciation of 2019 due to prior period error Change from FiFO to weighted average – credit Corrected beginning balance Net income Reduction in appropriation for treasury share Total Cash dividends paid to shareholders Current appropriation for contingencies Retained earnings, Dec. 31

₱100,000.00 ₱150,000.00 ₱450,000.00 ₱1,300,000.00 ₱200,000.00 ₱1,950,000.00 (₱500,000.00) (₱100,000.00) ₱1,350,000.00

ANGOLA COMPANY Comparative Income Statement Years ended December 31, 2021 and 2020 2021 ₱6,000,000.00 (₱2,900,000.00) ₱3,100,000.00 (₱1,490,000.00) ₱1,610,000.00

2020 ₱4,500,000.00 (₱2,300,000.00) ₱2,200,000.00 (₱1,800,000.00) ₱400,000.00

ANGOLA COMPANY Comparative Statement of Retained Earnings Years ended December 31, 2021 and 2020 2021 Retained earnings, Jan. 1 ₱1,250,000.00 Net income ₱1,610,000.00 Dividends paid (₱500,000.00) Retained earnings, Dec. 31 ₱2,360,000.00

2020 ₱1,000,000.00 ₱400,000.00 (₱150,000.00) ₱1,250,000.00

Sales Cost of goods sold Gross income Expenses Net income

Balances, Jan. 1 Retirement of treasury shares Property dividend Dividend to preference Error Net income Balances, Dec. 31

CARR COMPANY Statement of Changes in Equity Year Ended December 31, 2020 Ordinary Preference ₱5,150,000.00 ₱1,800,000.00 (₱150,000.00)

₱5,000,000.00

₱1,800,000.00

PANY nges in Equity mber 31, 2020 Share Premium Retained Earnings Treasury Shares ₱3,590,000.00 ₱4,000,000.00 ₱270,000.00 (₱120,000.00) (₱270,000.00) (₱750,000.00) (₱180,000.00) (₱325,000.00) ₱2,600,000.00 ₱3,470,000.00 ₱5,345,000.00 ₱0.00