St.

Matthew Academy of Cavite

“A Christ Center School”

WEEK 2 ACTIVITY
NAME: Jose Federico D. Sernio

Yr/Strand: 12-ABM

On February 1, 2014 Mira Delamar opened a store that sells school supplies. Her main
customers are the students and teachers of Happy students School that is situated in front of her store.
Mira wanted to know the financial position of Miras Store. Mira knew you were studying accounting so
she asked for your help.

The following information were made available to you.

a. To start the business, Mira opened a checking account in the name of Miras Store. The
statement of account from the bank shows that the checking account has a balance of P 31,535
as of December 2014.
b. Mira told you that she keeps P1000 in small bills and coins, in her store which she uses as a
change (sukli) fund.

c. As of December 31, 2014 cash on hand from sales and collections for the day amounted to
P12,000. This does not include Miras fund.

d. Mira Showed you a delivery receipt for P575. The receipt dated December 29, 2014 showed
that manila papers and color markers were delivered to a Ms. Rebecca Di who is a grade school
teacher in Happy Students School. Ms Di noted on the delivery receipt that she will pay Mira on
January 15, 2015.

e. Miras store is located on the ground floor of a commercial building. The commercial unit costs
her P5,000 per month for rent. As of December,31 2014 Miras Store has a remaining one month
advance rent with the landlord.

f. Mira purchased shelves and cabinets amounting to P30,000 to be used as display racks and
storage for her store. The shelves and cabinets are expected to be used in the store for 5 years.
Mira started using the shelves and cabinets on December 1, 2014

g. After closing the store on December 31, 2014, Mira counted all the unsold merchandise inside
the store. Mira does not have any other storage space except for the store premises. Based on
Miras count, the remaining unsold merchandise costs P 15,345.

h. Mira showed you a folder where she kept her unpaid receipts and bills. You noted the following.
a. A sales invoice dated December 25, 2014 from long lasting ballpoint pens Incorporated
amounting to P 2,465. The invoice term is 30 days.
 b. A sales invoice from Papier Paper Company dated December 15, 2014 for P 5,465 the
payment terms on the invoice is 40 days.
c. A Meralco bill for electricity consumption from December 1-31 for P3,400. The bill is
payable on January 15, 2015
d. February PLDT bill for P600. The bill is payable on January 17, 2015
e. Mira hired Emily to help her inside the store. Emilys wages were paid on December 30,
2014 for work rendered until December 29. Her pay for December 30 and 31 will be
included in her January wages.

i. Mira showed you an official receipt for P 1,395, she told you that this is a down payment from
Ms. Benny Ling, a grade 5 teacher in Happy Students School. Ms.Ling ordered green, red, and
blue poster paints for her students. The total price of the order was P2,790. According to their
agreement, Mira will deliver the paints on January 3, 2015.

j. On December 30, 2014, Mira borrowed P23,000 from her bank. She took advantage of the
bank’s special terms for small entrepreneurs. She signed a promissory note for her loan. The
principal is payable on December 30, 2016. The interest is payable monthly beginning January,
31,2015

k. Mira started her business by depositing P30,000 to open the checking account. On October
15,2014 the business is in need of additional cash so Mira deposited P5,000 to the checking
account. Mira also withdrew P15,000 from the business over the year.

REQUIREMENTS:

1. PREPARE A CLASSIFIED STATEMENT OF FINANCIAL POSITION FOR MIRAS STORE AS OF

DECEMBER 2014
2. DETERMINE THE NET INCOME FOR THE MONTH-ENDED DECEMBER 31, 2014
 ASSETS
Current Assets:
Cash P 44,535.00
Accounts Receivable 575.00
Inventory 15,345.00
Prepaid Rent 5,000.00
Total Current Assets P 65,455.00
Non Current Assets:
Property, Plant and Equipment P 30,000.00
Accumulated Depreciation (500.00)
Net Book Value P 29,500.00
Total Assets P 94,955.00

LIABILITIES AND EQUITY

Current Liabilities
Accounts Payable P 7,930.00
Accrued Expense 5,000.00
Unearned Income 1,395.00
Total Current Liabilities P 14,325.00
Non Current Liabilities
Longterm Payable P 23,000.00
Total Liabilities P 23,000.00
Owner’s Equity:
Mira, Capital P 57,630.00
Total Liabilities and Equity P 94,955.00
 St. Matthew Academy of Cavite
“A Christ Center School”

TRUE OR FALSE: read each sentence carefully and determine whether the statement is true or false.
Write your answers in the space provided before the number.

TRUE 1. The SFP provides readers with the information as to the company’s financial position as

of a specified date.

TRUE 2. Assets = liabilities + Owner’s equity is the governing equation of the SFP.

FALSE 3. Asset is an element of the SFP that has normal balance of credit.

TRUE 4. Debit Means to increase an account.

TRUE 5. T-account is a representation of the general ledger account used in teaching accounting.

TRUE 6. An entry on the opposite side of the normal balance of an account means to decrease

the account by the amount entered.

TRUE 7. The normal balance of liabilities and equity is credit.

FALSE 8. The normal balance of Unearned Income is Debit

TRUE 9. Credit means to decrease an account

FALSE 10. The normal balance of unearned Income is debit.

 St. Matthew Academy of Cavite
“A Christ Center School”

MODIFIED MATCHING TYPE

Long term payable Accounts payable Notes receivables
Notes payable Cash Prepaid expense
Ppe Owners capital Accrued expense
Account receivable Unearned income Inventory

Requirements:

1. Match the accounts on the table with the appropriate elements of the SFP below:

Assets Liabilities Equity

CASH ACCOUNTS PAYABLE OWNERS CAPITAL
ACCOUNTS RECEIVABLE ACCRUED EXPENSE
NOTES RECEIVABLE UNEARNED INCOME
INVENTORY LONG TERM PAYABLE
PPE NOTES PAYABLE
PREPAID EXPENSE

2. Use the accounts in the table above to prepare a pro forma SFP using the report and account
format.

ASSETS

Cash
ACCOUNTS RECEIVABLE
INVENTORY
PREPAID EXPENSE
NOTES RECEIVABLE
Total current assets

Property, Plant, and Equipment

Total non current assets

Total Assets
 Liabilities and Equity

ACCOUNTS PAYABLE
ACCRUED EXPENSE
UNEARNED INCOME
NOTES PAYABLE

Total current liabilities

Long-term payable

Total liabilities
Owners Capital

Total Liabilities and Equity

3. Use the accounts in the table in item number 1 to prepare a Classified SFP given the following
assumptions:
a. The prepaid expense will be used 12 months from the SFP date.
b. The unearned income is due for delivery in six months.
c. The full amount of notes receivable is due to be collected 10 months from the sfp date
d. The full amount of notes payable is due to be paid 8 months from the sfp date.

CLASSSIFIED STATEMENT OF FINANCIAL POSITION

Assets

Inventory
Accounts Receivable
Cash
Notes Receivable
Prepaid Expense
TOTAL CURRENT ASSETS

TOTAL NON-CURRENT ASSETS

PPE

TOTAL ASSETS
 LIABILITIES AND EQUITY

ACOUNTS PAYABLE
ACCRUED EXPENSE
UNEARNED INCOME
NOTES PAYABLE
TOTAL CURRENT LIABILITIES
LONG TERM PAYABLE
TOTAL NON-CURRENT LIABILITIES
OWNERS CAPITAL

TOTAL LIABILITIES AND EQUITY

4. Identify the SFP accounts that correspond to the given definitions:

a. Obligation to pay for goods and services already used in the operation of the business
such as salaries payable, utilities payable, rent payable, and interest payable.
Accrued Expense
b. The account reports the balances of bank savings and checking account as well as bills
coins, and checks on hand.
Cash on Bank
c. The cost of unsold merchandise that the company purchased for the purpose of
reselling to its customers in the normal course of its business.
Inventory
d. Long term assets that are used in the operations of the company.

PPE

e. Obligation to the suppliers of purchased inventories.

Accounts Payable
f. Obligation to pay documented in a promissory note.
Notes Payable
g. It is composed of the owners investments and the accumulated net income of the
company, net of any distributions to the owner.
Owners Equity
h. Advance payments by customers while goods and services are not yet delivered to the
customer
Prepaid
i. Asset that pertain to the company’s right to collect or right to claim payment
Accounts Receivable
j. Asset account that refers to future expenses paid in advance before the services or
goods are used
Statement of Comprehensive income
k. Obligations to pay to be settled at some specific date more than one year from the date
of the SFP.
Long-term Liabilities
l. Long term assets that have no tangible properties.

Property and Plant

St. Matthew Academy of Cavite

“A Christ Center School”
PROBLEM 1: determining the balance of the account using T-accounts

The T-account below is for the account Prepaid Expense

PREPAID EXPENSE

DEBIT CREDIT

MARCH 1, 2014 P150,600 JULY 31, 2014 P 45,760

AUGUST 15, 2014 95,450 DECEMBER 31, 2014 90,000

The balance of prepaid expenses on January 1, 2014 is P 245,675. What is the balance of Prepaid
Expenses as of December 31, 2014.

Answer:

P245,675 P 45,760 P491,725

150,000 __90,000 135,760

___95,450 P135,760 P355,965

P491,725

PROBLEM 2: determining the balance of the T-accounts.

The T-account below is for the account Accrued Expenses.

ACCRUED EXPENSE
DEBIT CREDIT
MARCH 1,2014 P 150, 630 JULY 31, 2014 P 54,760
AUGUST 15, 2014 95,170 DECEMBER 31, 2014 60,000

The balance of Accrued expenses on January 1, 2014 is P 245,675. What is the balance of
accrued expenses as of December 31, 2014.

Answer:

P150,630 P245,675 P360,435

95,170 54,760 245,800

P245,800 60,000 P114,635

P360,435

PROBLEM 3: Using T-Account

The cash account has a January 1, 2014 balance of P567,000.

1. During the year, the following transactions increased the cash account:
a. Company was able to collect P890,000 from its receivables.
b. Cash sales totaled P 376,855
2. During the year, the following transactions decreased the cash account:
a. A company paid P755,000 to suppliers and for other administrative expenses.
b. The owner withdrew P100,000 for his personal expenses.

Fill in the T-account for the effects of the above transactions.

CASH
PARTICULARS DEBIT CREDIT
January 1, 2014 balance 567,000
1.a. 890,000
1.b. 376,855
2.a. 755,000
2.b. 100,000
December 31, 2014 P978,855

Determine the balance of the cash account as of December 31, 2014

PROBLEM 4: COMPREHENSIVE PROBLEM

The following were taken from the books of Amihan Company:

Long term payable P 500,000

Notes payable 120,000
PPE 750,000
Accounts receivable 56,000
Accounts payable 65,000
Accumulated depreciation 100,000
Cash 77,000
Owners capital ?
Unearned income 15,345
Notes receivable 244,000
Prepaid expense 56,700
Accrued expense 37,890
Inventory 157,840
Intangible assets 124,500

ANSWER:

Owner’s Capital = Assets – Liabilities

Total Assets: P1,466,040.00

Total Liabilities: 838,235.00

Owner’s Capital = P 627,805.00

REQUIREMENTS

1. Based on the above set of accounts, determine total assets to be reported in the sfp.
TOTAL ASSETS P 1,466,040.00
2. Based on the above set of accounts, determine total liabilities to be reported in the SFP.
TOTAL LIABITIES: P 838,235.00
3. Based on the above set of accounts, determine the balance of the owners capital to be reported
in the SFP.
TOTAL OWNER’S EQUITY: P 627,805.00
4. Based on the above set of accounts, identify all the accounts with normal credit balances.
Compute the total of all accounts with credit balances.
P 1,450,695.00

5. Based on the above set of accounts, identify all the accounts with normal credit balances.
Compute the total of all accounts with credit balances.
P 1,481,385.00

6. The owners capital has a beginning balance of P500,545. The owner gave P 100,000 additional
contribution during the year. Based on the statement of comprehensive income, net income for
the year was P 120,445. How much money did the owner withdrew from the business?
P 480,100.00
7. Prepare a classified SFP given the following additional information:
a. Note payable is due 6 months from now
b. Note receivable is collectible 9 months from now
c. Prepaid expense will be used during the year.

CLASSIFIED STATEMENT OF FINANCIAL POSITION

AMIHAN’S CAPITAL

Assets
CASH P 77,000.00
ACCOUNTS RECEIVABLE P 56,000.00
NOTES RECEIVABLE P 244,000.00
PREPAID EXPENSE P 56,700.00
INVENTORY P 157,840.00

TOTAL CURRENT ASSETS P 591,540.00

PPE P 750,000.00
INTANGIBLE ASSETS P 124,500.00
ACCUMULATED DEPRECIATION P (100,000.00)
TOTAL NON-CURRENT ASSETS P 774,500.00
TOTAL ASSETS P 1,366,040.00

LIABILITIES AND EQUITY

ACCOUNTS PAYABLE P 65,000.00

NOTES PAYABLE P 120,000.00
UNEARNED INCOME P 15,345.00
ACCRUED EXPENSE P 37,890.00
TOTAL CURRENT LIABILITIES P 238,235.00
LONG TERM PAYABLE P 500,000.00
TOTAL NON-CURRENT LIABILITIES P 500,000.00
OWNER’S CAPITAL P 627,805.00
TOTAL LIABILITIES AND EQUITY P 1,366,040.00