Encantadia Company

Statement of Financial Position

As of December 31, 2018
ASSETS
Current Assets Note
Cash and Cash Equivalents 1 ₱ 1,930,000.00
Financial Asset @ Fair Value 2 ₱ 500,000.00
Trade and Other Receivables 3 ₱ 4,250,000.00
Merchandise Inventory ₱ 600,000.00
Prepayments 4 ₱ 50,000.00
Total Current Assets ₱ 7,330,000.00
Non-Current Assets
Property, Plant and Equipment, n 5 ₱ 5,500,000.00
Long-term Investments 6 ₱ 2,600,000.00
Intangible Asset 7 ₱ 285,000.00
Investment Property 8 ₱ 1,000,000.00
Other Non-Current Asset 9 ₱ 80,000.00
Total Non-Current Assets ₱ 9,465,000.00
TOTAL ASSETS ₱16,795,000.00
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities
Current Liabilities
Trade and Other Payables 10 ₱ 1,502,500.00
Provisions 11 ₱ 100,000.00
Loans Payable- Short Term ₱ 300,000.00
Bonds Payable- Current Portion ₱ 1,000,000.00
Total Current Liabilities ₱ 2,902,500.00
Non-Current Liabilities
Bonds Payable- Non-Current Portion ₱ 9,000,000.00
Bonds Payable- 5 year term ₱ 1,000,000.00
Deferred Tax Liability ₱ 700,000.00
Total Non-Current Liabilities ₱10,700,000.00
Total Liabilities ₱13,602,500.00
Shareholder's Equity
Share Capital ₱ 1,800,000.00
Reserves 12 ₱ 700,000.00
Retained Earnings ₱ 692,500.00
Total Shareholder's Equity ₱ 3,192,500.00
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY ₱16,795,000.00
 Encantadia Company
Income Statement
For the Year Ended December 31, 2018
Note
Net Sales 13 ₱ 3,588,000.00
Cost of Goods Sold 14 -₱ 2,420,000.00
Gross Profit ₱ 1,168,000.00
Other Income 15 ₱ 200,000.00
Total Income ₱ 1,368,000.00
Operating Expenses
Distribution 16 ₱ 469,000.00
Administrative 17 ₱ 956,500.00 -₱ 1,425,500.00
NET INCOME -₱ 57,500.00
Notes to Financial Statements

Note 1 - Cash and Cash Equivalents

Cash in Bank - Savings ₱ 300,000.00
Cash in Bank- Current ₱ 1,000,000.00
Petty Cash Fund ₱ 30,000.00
Treasury Bills ₱ 600,000.00
Total ₱ 1,930,000.00

Note 2- Financial Asset @ Fair Value

Trading Securities ₱ 500,000.00
Total ₱ 500,000.00

Note 3- Trade and Other Receivables

Claim Receivable ₱ 300,000.00
Accounts Receivable ###
Allowance for Doubtful Accounts -₱ 200,000.00 ₱ 1,600,000.00
Subscription Receivable ₱ 250,000.00
Advances of officers & employees ₱ 100,000.00
Advances to Suppliers ₱ 450,000.00
Interest Receivables ₱ 250,000.00
Note Receivables ₱ 1,300,000.00
Total ₱4,250,000.00

Note 4- Prepayments
Unused Supplies ₱ 20,000.00
Prepaid Advertising ₱ 30,000.00
Total ₱ 50,000.00

Note 5- Property, Plant and Equipment

Land ₱ 1,400,000.00
Building ###
Acc. Depreciation- Bldg -₱ 300,000.00 ₱ 1,900,000.00
Furniture & Fixtures ₱ 900,000.00
Acc. Depreciation- F&F -₱ 200,000.00 ₱ 700,000.00
Delivery Truck ###
Acc. Depreciation- Delivery Truck -₱ 300,000.00 ₱ 1,500,000.00
Total ₱5,500,000.00

Note 6- Long-Term Investments

Sinking Fund ₱ 1,200,000.00
Time Deposit ₱ 400,000.00
Advances to Affiliates ₱ 1,000,000.00
Total ₱2,600,000.00
Note 7- Intangible Asset
Patent ₱ 300,000.00
Amortization -₱ 15,000.00
Total ₱ 285,000.00

Note 8- Investment Property

Land held for speculation ₱ 1,000,000.00
Total ₱1,000,000.00

Note 9- Other Non-Current Asset

Long-Term Refundable Deposit ₱ 80,000.00
Total ₱ 80,000.00

Note 10- Trade and Other Payables

Accounts Payable ₱ 350,000.00
Accrued Expenses ₱ 62,500.00
Warranty Liability ₱ 40,000.00
SSS/ PHIC/ HDMF Payable ₱ 60,000.00
VAT Payable ₱ 100,000.00
Estimated Premium Liability ₱ 90,000.00
Salaries Payable ₱ 600,000.00
Advances from customers ₱ 200,000.00
Total ₱1,502,500.00

Note 11- Provisions

Estimated Liability for Lawsuit ₱ 100,000.00
Total ₱ 100,000.00

Note 12-Reserves
Share Premium ₱ 500,000.00
Retained Earnings- Appropriated ₱ 200,000.00
Total ₱ 700,000.00

Note 13- Net Sales

Gross Sales ₱ 3,688,000.00
Sales Discounts -₱ 40,000.00
Sales Returns -₱ 60,000.00
Net Sales ₱3,588,000.00
Note 14- Cost of Goods Sold
Beg. Inventory ₱ 900,000.00
Purchases ###
Purchase Returns -₱ 70,000.00
Purchase Discounts -₱ 30,000.00
Net Purchases ###
Freight-in ₱ 20,000.00 ₱ 2,120,000.00
Goods Available for Sale ₱3,020,000.00
Ending Inventory -₱ 600,000.00
Total Cost of Goods Sold ₱2,420,000.00

Note 15- Other Income

Rent Income ₱ 50,000.00
Interest Income ₱ 150,000.00
Total ₱ 200,000.00

Note 16- Distribution Expenses

Delivery Expenses ₱ 6,000.00
Sales Salaries ₱ 430,000.00
Store Supplies Expense ₱ 3,000.00
Advertising Expense ₱ 30,000.00
Total ₱ 469,000.00

Note 17- Administrative Expenses

Office Salaries Expense ₱ 120,000.00
Depreciation Expense ₱ 800,000.00
Light & Water Expense ₱ 4,000.00
Taxes & Licenses ₱ 3,000.00
Office Supplies Expense ₱ 2,000.00
Rent Expense ₱ 12,500.00
Amortization ₱ 15,000.00
Total ₱ 956,500.00
 Encantadia Company
Statement of Changes in Equity
For the Year Ended December 31, 2018
Share Capital Reserves
Balances, beg. ₱ 1,800,000.00 ₱ 500,000.00
Correction of error
resulting from overstatement of beginning inventory
Correction of error
resulting from overstatement of purchases
Correction of error
resulting from overstatement of rent income
Correction of error
from unrecorded accrued income
Correction of error
from unrecorded salaries
Net Loss
Retained Earning Appropriated ₱ - ₱ 200,000.00
Balances, end ₱ 1,800,000.00 ₱ 700,000.00
Retained Earnings
₱ 1,000,000.00
-₱ 100,000.00
₱ 300,000.00
-₱ 50,000.00
₱ 100,000.00
-₱ 300,000.00
-₱ 57,500.00
-₱ 200,000.00
₱ 692,500.00
 Encantadia Company
Statement of Cash Flows
For the Year Ended December 31, 2018

Operating Activities
Net loss - 57,500.00
Depreciation 800,000.00
Amortization 15,000.00
Incease in FA @ Fair Value - 500,000.00
Increase Trade and Other Receivables - 4,150,000.00
Decrease Merchandise Inventory 400,000.00
Increase Prepaid Expenses - 100,000.00
Increase Trade and Other Payables 1,372,500.00
Increase Current Provisions 230,000.00
NET CASH USED IN OPERATING ACTIVITIES
Investing Activities
Increase in PPE - 5,500,000.00
Increase Long Term Investments - 2,600,000.00
Increase Intangible Assets - 300,000.00
Increase Other Noncurrent Assets - 1,180,000.00
NET CASH USED IN INVESTING ACTIVITIES
Financing Activities
Increase Short Term Borrowing 300,000.00
Increase Bonds Payable 11,000,000.00
Decrease Bonds Payable - 1,000,000.00
Increase Deffered Tax Liability 700,000.00
Increase Share Capital 1,800,000.00
Increase Reserves 700,000.00
NET CASH PROVIDED BY FINANCING ACTIVITIES
ENDING CASH BALANCE
1, 2018

- 1,990,000.00

- 9,580,000.00

13,500,000.00
###
 Encantadia Company
Worksheet
December 31, 2018
Trial Balance Adjustments
Account Titles Dr. Cr. Dr. Cr.
Cash in Bank- Savings 300,000
Cash in Bank- Current 1,000,000
Petty Cash Fund 30,000
Trading Securities 500,000
Treasury Bills 600,000
Accounts Receivable 2,000,000 e. 200,000
Allowance for Doubtful Accounts 200,000
Advances of Officers and Employees 100,000
Advances to Suppliers 50,000 i. 400,000
Advances to Affiliates 1,000,000
Notes Receivables 1,100,000 e. 200,000
Claims Recivable 300,000
Interest Receivable l. 250,000
Subscription Receivable 250,000
Merchandise Inventory 1,000,000 g. 100,000
Unused Supplies 20,000
Prepaid Advertising 60,000 c. 30,000
3 years Time Deposit- BPI 400,000
Long Term Refundable Deposit 80,000
Sinking Fund- for 5 year term bonds 1,200,000
Land 1,400,000
Land held for Speculation 1,000,000
Accumulated Deprn. Building 300,000
Building 2,200,000
Furniture and Fixtures 900,000
Accumulated Deprn. F&F 200,000
Delivery truck 1,800,000
Accumulated Deprn. Delivery Truck 300,000
Patent 300,000 d. 15,000
Accounts Payable 350,000
Advances from Customers a 200,000
Loans Payable 300,000
Accrued Expenses 50,000 c., j. 612,500
Estimated Liability for Lawsuit 100,000
Warranty Liability 40,000
Estimated Premiums Liability 90,000
SSS/ PHIC Payable 60,000
VAT PAYABLE 100,000
Deffered Tax Liability 700,000
Bonds Payable due annually 1,000,000 10,000,000
Bond Payable 5 year term Bonds 1,000,000
Ordinary Shares Par 100 1,800,000
Share Premium 500,000
Retained Earnings- appropriated 200,000
Retained Earnings- Unappropriated 800,000 g/j/k 450,000 i/l 400,000
Sales 3,888,000 a. 200,000
Sales Return 60,000
Sales Discount 40,000
Purchases 2,300,000 i. 300,000 i 400,000
Purchase Returns 70,000
Purchase Discounts 30,000
Freight In 20,000
Rent Income k. 50,000
Interest Income l. 100,000 l. 250,000
Office Supplies Expense 2,000
Store Supplies Expense 3,000
Delivery Expense 6,000
Sales Salaries 130,000 j. 600,000 j. 300,000
Office Salaries 120,000
Light and Water Expense 4,000
Advertising Expense c 30,000
Rent Expense c. 12,500
Taxes and Licences 3,000
Amortization Expense d. 15,000
Depreciation Expense 800,000

TOTAL 21,078,000 21,078,000 2,557,500 2,557,500

Net Income (Loss)
 ADJUSTING ENTRIES
Adjusted Trial Balnce
Dr. Cr. a. Sales 200,000
300,000 Advances from customers 200,000
1,000,000
30,000 b. NO ENTRY
500,000
600,000 c. Advertising expense 30,000
1,800,000 Prepaid advertising 30,000
200,000
100,000 Rent expense 12,500
450,000 Accrued expense 12,500
1,000,000
1,300,000 d. Amortization expense 15,000
300,000 Patent 15,000
250,000
250,000 e.Notes receivable 200,000
900,000 Accounts receivable 200,000
20,000
30,000 f. NO ENTRY
400,000
80,000 g. Retained earnings -Unappropriated 100,000
1,200,000 Merchandise Inventory - beg. 100,000
1,400,000
1,000,000 h. NO ENTRY
300,000
2,200,000 i. Purchases 300,000
900,000 Retained earnings- Unappropriated 300,000
200,000
1,800,000 Advances to suppliers 400,000
300,000 Purchases 400,000
285,000
350,000 j. Sales salaries 600,000
200,000 Accrued expense 600,000
300,000
662,500 Retained earnings-Unappro. 300,000
100,000 Sales salaries 300,000
40,000
90,000 k. Retained earnings -Unappro. 50,000
60,000 Rent Income 50,000
100,000
700,000 l. Interest income 100,000
10,000,000 Retained earnings 100,000
1,000,000
1,800,000 Interest receivable 250,000
500,000 Interest income 250,000
 200,000
750,000
3,688,000
60,000
40,000
2,200,000
70,000
30,000
20,000
50,000
150,000
2,000
3,000
6,000
430,000
120,000
4,000
30,000
12,500
3,000
15,000
800,000

21,840,500 21,840,500
 Encantadia Company
Worksheet
December 31, 2018
Trial Balance Adjustments
Account Titles Dr. Cr. Dr. Cr.
Adjusted Trial Balnce
Dr. Cr.