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Lan Services Incorporated Income Statement For The Year Ended December 31,2020

Lan Services reported net income of ₱145,000 for the year ended December 31, 2020. The company saw increases in cash, inventory, prepaid expenses, land, buildings, equipment, accounts payable, and bonds payable. Accounts receivable, income taxes payable, and accumulated depreciation also changed. The company purchased new buildings and equipment, issued stock, and paid dividends during the year.

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81 views5 pages

Lan Services Incorporated Income Statement For The Year Ended December 31,2020

Lan Services reported net income of ₱145,000 for the year ended December 31, 2020. The company saw increases in cash, inventory, prepaid expenses, land, buildings, equipment, accounts payable, and bonds payable. Accounts receivable, income taxes payable, and accumulated depreciation also changed. The company purchased new buildings and equipment, issued stock, and paid dividends during the year.

Uploaded by

Jasmine Acta
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Lan Services Incorporated

Income Statement
For the Year Ended December 31,2020
Sales revenue ₱ 507,000
Cost of Goods Sold 150,000
Operating expenses (excluding depreciation) 111,000
Depreciation expense 9,000
Loss on disposal for plant assets 3,000
Interest expense 42,000 315,000
Income before income taxes ₱ 192,000
Income tax expense 47,000
Net Income 145,000
Lan Services Incorporated
Comparative Statement of Financial Position
December 31, 2020
Change in Account
Balance
Increase/Decrease
Assets 2020 2019
Current assets
Cash ₱ 55,000 ₱ 33,000 22,000 Increase
Accounts receivable 20,000 30,000 10,000 Decrease
Inventory 15,000 10,000 5,000 Increase
Prepaid expenses 5,000 1,000 4,000 Increase
Property, plant, and equipment
Land 130,000 20,000 110,000 Increase
Buildings 160,000 40,000 120,000 Increase
Accumulated depreciation - buildings (11,000) (5000) 6,000 Increase
Equipment 27,000 10,000 17,000 Increase
Accumulated depreciation - equipment (3,000) (1000) 2,000 Increase
Total Assets ₱ 398,000 ₱ 138,000

Liabilities and Stockholders' Equity


Current liabilities
Accounts payable 28,000 12,000 16,000 Increase
Income taxes payable 6,000 8,000 2,000 Decrease
Long-term liablities
Bonds payable 130,000 20,000 110,000 Increase
Stockholders' Equity
Common stock 70,000 50,000 20,000 Increase
Retained earnings 164,000 48,000 116,000 Increase
Total liabilites and stockholders equity 398,000 138,000
Increase
Decrease
Increase
Increase

Increase
Increase
Increase
Increase
Increase

Increase
Decrease

Increase

Increase
Increase
Debit Credit
a. Operating- Decrease in Accounts Receivable 10,000
Accounts Receivable 10,000

b. Inventory 5,000
Operating-Increase in Inventory 5,000

c. Prepaid Expenses 4,000


Operating-Increase in Prepaid Expenses 4,000

d. Land 110,000
Bonds Payable 110,000

e. Buildings 120,000
Investing- Purchase of Building 120,000

f. Equipment 25,000
Investing- Purchase of Equipment 25,000

g. Investing- Sale of Equipment 4,000


Loss on disposal for plant assets 3,000
Accumulated Depreciation-Equipment 1,000
Equipment 8,000

h. Operating- Increase in Accounts Payable 16,000


Accounts Payable 16,000

i. Income Taxes Payable 2,000


Operating-Decrease in Income Tax Payable 2,000

j Financing- Issuance of common stock 20,000


Common Stock 20,000

k. Operating- Depreciation Expense 6,000


Accumulated Depreciation-Buildings 6,000

l. Operating- Depreciation Expense 3,000


Accumulated Depreciation-Buildings 3,000

m. Operating-Net Income 145,000


Retained Earnings 145,000

n. Retained Earnings 29,000


Financing-Payment of Dividends 29,000

o. Cash 22,000
Increase in Cash 22,000
Lan Services Incorporated
Worksheet
Statement of Cash Flows for the Year Ended December 31,2020

Balance Reconciling Items Balance


Balance Sheet Accounts 12/31/19 Debit Credit 12/31/20
Debits
Cash 33,000 22,000 55,000
Accounts Receivable 30,000 10,000 20,000
Inventory 10,000 5,000 15,000
Prepaid Expenses 1,000 4,000 5,000
Land 20,000 110,000 130,000
Buildings 40,000 120,000 160,000
Equipment 10,000 25,000 8,000 27,000
Total 144,000 412,000
Credits
Accounts Payable 12,000 16,000 28,000
Income Tax Payable 8,000 2,000 6,000
Bonds Payable 20,000 110,000 130,000
Accumulated Depreciation-Buildings 5,000 6,000 11,000
Accumulated Depreciation-Equipment 1,000 1,000 3,000 3,000
Common Stock 50,000 20,000 70,000
Retained Earnings 48,000 29,000 145,000 164,000
Total 144,000 412,000

Statement of Cash Flows Effects


Operating activities
Net Income 145,000
Decrease in accounts receivable 10,000
Increase in inventory 5,000
Increase in prepaid expenses 4,000
Increase in accounts payable 16,000
Decrease in income taxes payable 2,000
Depreciation expense 9,000

Loss on disposal of plant assets 3,000


Investing Activities
Purchase of building 120,000
Purchase of equipment 25,000
Sale of equipment 4,000
Financing activities
Issuance of common stock 20,000
Payment of dividends 29,000
Totals 525,000 503,000
Increase in cash 22,000
Totals 525,000 525,000

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