1.

Philippine Airlines
a. Accrual Rule
Cash received in September to October flights 5,500,000.00
Cash received in October for October flights 3,000,000.00
Cash received in November for October flights 4,500,000.00
Revenue under Accrual Rule ₱ 13,000,000.00

b. Cash Concept
Cash received in October for October flights 3,000,000.00
Cash received in October for November flights 4,000,000.00
Revenue under Cash Concept ₱ 7,000,000.00

2. Bentong Consultancy
a. Accrual Rule
Salary payments in June for work performed by employees in June 25,000.00
Salary payments in July for work performed by employees in June 10,000.00
Revenue under Accrual Rule ₱ 35,000.00

b. Cash Concept
Salary payments in June for work performed by employees in May 20,000.00
Salary payments in June for work performed by employees in June 25,000.00
Revenue under Cash Concept ₱ 45,000.00

3. Master Music Company

Cash Basis Income Statement
Revenues:
Cash from Music Lessons 10,000.00
Expenses
Wages Paid 800.00
Net Income 9,200.00

Accrual Basis Income Statement

Revenues:
Cash from Music Lessons 7,000.00
Expenses
Wages Paid 600.00
Net Income 6,400.00
 4. High
Performance
Company

Revenues Cash Received Asset other Liabilities Owner's

Transaction (Expenses) or (Paid) than cash Incurred (Paid) Capital

Balances 75,000.00 150,000.00 80,000.00 145,000.00

a 100,000.00 80,000.00 20,000.00
b (25,000.00) (25,000.00)
c (50,000.00) 50,000.00
d (75,000.00) (50,000.00) 25,000.00
e 60,000.00 60,000.00
f (10,000.00) (10,000.00)
Profit ₱ 25,000.00
g (25,000.00) 25,000.00
Balances ₱ 80,000.00 ₱ 220,000.00 ₱ 80,000.00 ₱ 220,000.00

a. Profit is P25,000 while cash is P80,000. They are not the same because the revenue is not collected in cash fully, some are
b. A = L + C; 300,000 = 80,000 + 220,000 ; 300,000 = 300,000
The owner is better off at the end of the because the earned a profit of 25,000. The capital also increase from 145,000 to 22
collected in cash fully, some are on account-in accounts receivable

so increase from 145,000 to 220,000.

Problem 5
Income
Statement of Financial Position
Statement
Business + Revenues -
Total Assets Total Liabilities Owner’s Equity
Transaction Expenses
Owner invested
1 P100000 cash in 100,000.00 100,000.00
business
Incurred legal
2 expenses and (10,000.00) (10,000.00)
paid P10,000
Paid cash for
3 employee (15,000.00) (15,000.00)
wages, P15,000
Issued note for
4 cash borrowed, 300,000.00 300,000.00
P300,000

Received
5 P50,000 cash for 50,000.00 50,000.00
service provided

Bought car
P500,000.
6 250,000.00 250,000.00
50% down, note
for 50%
Bought office
7 equipment on 180,000.00 180,000.00
credit, P180,000

Provided
services to
8 75,000.00 75,000.00
clients on credit,
P75,000

9 Collected 50% on 37,500 -37,500

client accounts

Owner withdrew
10 (5,000.00) (5,000.00)
cash, P5,000

Net Income/Net
11 loss to Owner’s (100,000.00) 100,000.00
Equity

a Totals ₱ - ₱ 925,000.00 ₱ 730,000.00 ₱ 195,000.00

925,000 = 925,000.00

b Transactions:
 1 100,000.00
2 (10,000.00)
3 (15,000.00)
4 300,000.00
5 50,000.00
6 (250,000.00)
9 37,500.00
10 (5,000.00)
Total Cash ₱ 207,500.00
Problem 6

Nat Luna Law Firm

Statement of Income
For the month ended June 30

Consulting Fees Earned ₱ 250,000.00

Less: Expenses
Rent expense 25,500.00
Salaries expenses 60,000.00
Telephone expenses 7,200.00
Advertising expenses 6,800.00 99,500.00
Net Income ₱ 150,500.00

Nat Luna Law Firm

Statement of Changes in Owner's Equity
For the month ended June 30

Owner Investment 800,000.00

Add: Net Income 150,500.00
Total 950,500.00
Less: Luna, Drawings 33,000.00
Luna, Capital ₱ 917,500.00

b.
Nat Luna Law Firm
Statement of Income
For the month ended June 30

Consulting Fees Earned ₱ 250,000.00

Less: Expenses
Rent expense 25,500.00
Salaries expenses 60,000.00
Telephone expenses 7,200.00
Depreciation Expense 6,800.00
Advertising expenses 6,800.00 106,300.00
Revised Net Income ₱ 143,700.00
a. Owner's Equity
Cash 54,200.00
Medical Supplies 3,850.00
Medical Equipment 75,000.00
Accounts Payable (25,000.00)
Galing, Capital ₱ 108,050.00

b..

ASSETS =
Date Accounts Medical
Cash Medical Supplies
Receivable Equipment
Balances 54,200.00 3,850.00 75,000.00
a 40,000.00
b (15,000.00)
c 10,000.00 10,000.00
d (15,000.00)
e 8,025.00
f 12,450.00
g 13,000.00 (13,000.00)
h (1,500.00)
i (3,980.00)
j (10,000.00)
Balances ₱ 75,700.00 ₱ 5,025.00 ₱ 12,320.00 ₱ 75,000.00
A=L + C ₱ 168,045.00

Family Medical Clinic

Statement of Comprehensive Income
For the month ended of July

Service Income ₱ 68,025.00

Less: Expenses
Supplies Expense 3,980.00
Repair Expense 250.00
Rent Expense 15,000.00
Salaries Expense 850.00
Utilities Expense 400.00 20,480.00
Net Income ₱ 47,545.00

Family Medical Clinic

Statement of Financial Position
As of July 31

ASSETS
Cash 75,700.00
Accounts Receivable 5,025.00
Medical Supplies 12,320.00
Medical Equipment 75,000.00
TOTAL ASSETS ₱ 168,045.00

LIABILITIES & EQUITY

Accounts Payable 22,450.00
Total Liabilities 22,450.00
Galing, Capital 145,595.00
TOTAL LIABILITIES AND EQUITY ₱ 168,045.00
 Family Medical Clinic
Transaction Analysis Worksheet
For the month ended of July

LIABILITIES + Equity
Accounts Payable Galing, Capital Galing, Drawings Service Income Supplies Expense
25,000.00 108,050.00
40,000.00
(15,000.00)
20,000.00

8,025.00
12,450.00

3,980.00
10,000.00
₱ 22,450.00 ₱ 108,050.00 ₱ 10,000.00 ₱ 68,025.00 ₱ 3,980.00
₱ 168,045.00
Equity
Repair Expense Rent Expense Utilities Expense Salaries Expense

15,000.00

250.00 400.00 850.00

₱ 250.00 ₱ 15,000.00 ₱ 400.00 ₱ 850.00

 Sue Peria
Accounts
Date Cash Supplies Furniture
Receivable

Balances 61,000.00 14,500.00 50,500.00

2 45,000.00
2 28,000.00
5 (10,000.00)
8 (7,250.00) 7,250.00
10 8,000.00
11 (7,500.00)
14 5,000.00
15 (15,000.00)
18 12,000.00
20 1,000.00
24 (5,000.00)
25 6,000.00 (6,000.00)
27 3,500.00
28 (9,000.00)
29 12,000.00
30 (22,500.00)
31 (3,500.00)
Balances ₱ 89,750.00 ₱ 9,500.00 ₱ 18,250.00 ₱ 50,500.00
A=L + C

b.. Working paper of cash flows

Beginning Cash 61,000.00

Processing Fees in Cash 55,500.00
Commission Income in Cash 43,500.00
Collection of Receivable 6,000.00
Salaries Expense (30,000.00)
Utilities Expense (9,000.00)
Rent Expense (7,500.00)
Payment to Creditor (5,000.00)
Payment of notes to BDO (10,000.00)
Supplies Purchased (7,250.00)
Equipment acquired (7,500.00)
Ending Cash ₱ 89,750.00
 Accounts Account due to 24 month Note
Equipment Feria, Capital
Payable Ros Due to BDO

25,000.00 15,000.00 50,000.00 86,000.00

45,000.00
28,000.00
(10,000.00)

8,000.00
15,000.00 7,500.00
5,000.00
(15,000.00)
12,000.00
1,000.00
(5,000.00)

3,500.00
(9,000.00)
12,000.00
(22,500.00)
(3,500.00)
₱ 40,000.00 ₱ 7,500.00 ₱ 10,000.00 ₱ 40,000.00 ₱ 150,500.00
₱ 208,000.00 ₱ 208,000.00
 Sue Feria Travel Agency
Explanation for changes
Statement of Comprehensive Income
Investment Taxes and Licenses Registration
Expenses For the month ended April 30, 2015
Processing Fees
Commission Income Processing Fees
Commission Income
Total Income
Commission Income Less: Expenses
Taxes and Licenses
Processing Fees Registration Expenses
Salaries Expense Salaries Expense
Processing Fees Utilities Expense
Processing Fees Rent Expense
Supplies Expense
Net Income
Commission Income
Utilities Expense
Processing Fees and Commission Income
Salaries expense and rent expense Sue Feria Travel Agency
Supplies Expense Statement of Changes in Owner's Equity
For the month ended April 30, 2015

Owner Investment
Add: Net Income
Ending Capital

Sue Feria Travel Agency

Statement of Financial Position
As of April 30, 2015

ASSETS
Cash
Accounts Receivable
Supplies
Furniture
Equipment
TOTAL ASSETS

LIABILITIES & EQUITY

Accounts Payable
Account due to Ros
24 month Note Due to BDO
Total Liabilities

Feria, Capital
TOTAL LIABILITIES AND EQUITY
 Sue Feria Travel Agency

ment of Comprehensive Income

e month ended April 30, 2015

₱ 67,500.00
47,000.00
114,500.00

8,000.00
6,000.00
30,000.00
9,000.00
7,500.00
3,500.00 64,000.00
₱ 50,500.00

Sue Feria Travel Agency

ent of Changes in Owner's Equity
e month ended April 30, 2015

100,000.00
50,500.00
₱ 150,500.00

Sue Feria Travel Agency

tement of Financial Position
As of April 30, 2015

89,750.00
9,500.00
18,250.00
50,500.00
40,000.00
₱ 208,000.00

7,500.00
10,000.00
40,000.00
 57,500.00

150,500.00
₱ 208,000.00
a.
Accounts
Date Cash Supplies Delivery Van Notes Payable Utilities Payable
Receivable
Jul-01 100,000.00
2 (20,000.00) 120,000.00 100,000.00
3 (15,000.00)
5 22,000.00 22,000.00
9 (2,000.00)
12 1,500.00
15 12,500.00
17
20 15,000.00 (5,000.00)
23 (25,000.00) (25,000.00)
26 (2,500.00) 2,500.00
29 (7,500.00)
30 (30,000.00)
30 (1,000.00)
Total 47,500.00 17,000.00 500.00 120,000.00 75,000.00 2,500.00
A= L+C 185,000.00 185,000.00
Accounts Fedor, Capital Revenues
Account Title
Payable (Drawings) (Expenses)
100,000.00 Investment Stateme
For th
(15,000.00) Rent Expense
44,000.00 Service Income Service Income
(2,000.00) Drawings Less: Expenses
1,500.00
12,500.00 Service Income
7,500.00 (7,500.00) Gasoline and Oil
10,000.00 Service Income

(5,000.00) Utilities Expense Net Income

(7,500.00)
(30,000.00) Salaries Expense
(1,000.00) Supplies Expense
1,500.00 98,000.00 8,000.00
State

ASSETS

TOTAL ASSETS

LIABILITIES & EQUITY

Total Liabilities

Fedor, Capital
TOTAL LIABILITIES AND EQUITY

10..

Net cash from Operating Actvitie

Cash paid from Operating Activ

Net cash from Investing Activitie

Cash paid from Investing Activiti

Net Cash from Financing Activitie

Cash received from Financing A

Ending Capital
 Fed Deliveries
Statement of Comprehensive Income
For the month ended July 31,2015

Service Income ₱ 66,500.00

Less: Expenses
Rent Expense 15,000.00
Gasoline and Oil 7,500.00
Utilities Expense 5,000.00
Salaries Expense 30,000.00
Supplies Expense 1,000.00 58,500.00
Net Income ₱ 8,000.00

Fed Deliveries
Statement of Financial Position
As of July 31,2015

ASSETS
Cash 47,500.00
Accounts Receivable 17,000.00
Supplies 500.00
Delivery Van 120,000.00
TOTAL ASSETS ₱ 185,000.00

LIABILITIES & EQUITY

Notes Payable 75,000.00
Utilities Payable 2,500.00
Accounts Payable 1,500.00
Total Liabilities 79,000.00

Fedor, Capital 106,000.00

TOTAL LIABILITIES AND EQUITY ₱ 185,000.00

Fed Deliveries
Statement of Cash Flows
As of July 31,2015

Net cash from Operating Actvities

Payment of Rent (15,000.00)
Collection from Clients 44,500.00
 Collection of Receivable 5,000.00
Payment to Creditors (7,500.00)
Utilities Paid (2,500.00)
Salaries Paid (30,000.00)
Cash paid from Operating Activities (5,500.00)

Net cash from Investing Activities

Acquisition of Delivery Van (45,000.00)
Cash paid from Investing Activities (45,000.00)

Net Cash from Financing Activities

Investment from Owner 100,000.00
Drawings from Owner. (2,000.00)
Cash received from Financing Activities 98,000.00

Ending Capital ₱ 47,500.00

a.
Accounts Accounts
Date Cash Office Supplies Equipment Notes Payable
Receivable Payable
Jul-01 50,000.00 10,000.00
2 (25,000.00)
4 120,000.00 120,000.00
6 (2,500.00) 2,500.00
8 32,000.00
10 27,000.00
15 (6,200.00)
18 15,000.00 (15,000.00)
25 40,000.00 60,000.00
28 (5,000.00)
30 (6,200.00)
31
31 (2,000.00)
Total 92,100.00 72,000.00 500.00 130,000.00 120,000.00 0
A= L+C 294,600.00 294,600.00
Utilties Payable Wong, Capital Explanation for changes
M
60,000.00 Investment Statement of C
(25,000.00) Rent Expense and Utilties Expense For the mont

Service Income
32,000.00 Service Income Less: Expenses
27,000.00 Service Income
(6,200.00) Salaries and Wages

100,000.00 Service Income

(5,000.00) Drawings Net Income
(6,200.00) Salaries and Wages
5,600.00 (5,600.00) Utillities Expense
(2,000.00) Supplies Expense
5,600.00 169,000.00
M
Statement o
As of

ASSETS

TOTAL ASSETS

LIABILITIES & EQUITY

Total Liabilities

Wong, cApital
TOTAL LIABILITIES AND EQUITY

10..
M
Stateme
As of

Net cash from Operating Actvities

Cash paid from Operating Activities

Net cash from Investing Activities

Net Cash from Financing Activities

Cash received from Financing Activities

Ending Capital
 Mabel Wong
Statement of Comprehensive Income
For the month ended July 31,2015

Service Income ₱ 159,000.00

Less: Expenses
Rent Expense 24,500.00
Utilties Expense 6,100.00
Salaries and Wages 12,400.00
Supplies Expense 2,000.00 45,000.00
Net Income ₱ 114,000.00

Mabel Wong
Statement of Financial Position
As of July 31,2015

ASSETS
Cash 92,100.00
Accounts Receivable 72,000.00
Office Supplies 500.00
Equipment 130,000.00
TOTAL ASSETS ₱ 294,600.00

LIABILITIES & EQUITY

Accounts Payable 120,000.00
Utilties Payable 5,600.00
Total Liabilities 125,600.00

Wong, cApital 169,000.00

TOTAL LIABILITIES AND EQUITY ₱ 294,600.00

Mabel Wong
Statement of Cash Flows
As of July 31,2015

Net cash from Operating Actvities

Payment of Rent (24,500.00)
Collection from Clients 72,000.00
Office Supplies purchased (2,500.00)
Collection of Receivable 15,000.00
 Utilities Paid (500.00)
Salaries Paid (12,400.00)
Cash paid from Operating Activities 47,100.00

Net cash from Investing Activities 0

Net Cash from Financing Activities

Investment from Owner 50,000.00
Drawings from Owner. (5,000.00)
Cash received from Financing Activities 45,000.00

Ending Capital ₱ 92,100.00