Scribd
Upload
50 views5 pages

Llagas 01 Laboratory Exercise 1

Lan Services Inc. reported net income of ₱145,000 for the year ended December 31, 2020. Key events included an increase in sales revenue to ₱507,000, increases in various assets including land, buildings and equipment, and issuance of bonds payable and common stock to fund capital expenditures. Cash flows from operating activities provided ₱172,000 and cash used for investing activities was ₱141,000, resulting in an overall increase in cash of ₱22,000.

Uploaded by

Angela Fye Llagas
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
50 views5 pages

Llagas 01 Laboratory Exercise 1

Lan Services Inc. reported net income of ₱145,000 for the year ended December 31, 2020. Key events included an increase in sales revenue to ₱507,000, increases in various assets including land, buildings and equipment, and issuance of bonds payable and common stock to fund capital expenditures. Cash flows from operating activities provided ₱172,000 and cash used for investing activities was ₱141,000, resulting in an overall increase in cash of ₱22,000.

Uploaded by

Angela Fye Llagas
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
You are on page 1/ 5

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 of 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
Assets 2020 2019 Increase/Decrease
Current Aseets
Cash ₱ 55,000 ₱ 33,000 ₱ 22,000
Accounts receivable 20,000 30,000 - 10,000
Inventory 15,000 10,000 5,000
Prepaid expenses 5,000 1,000 4,000
Property, plant, and equipment
Land 130,000 20,000 110,000
Buildings 160,000 40,000 120,000
Accumulated Depreciation - buildings - 11,000 - 5,000 - 6,000
Equipment 27,000 10,000 17,000
Accumulated Depreciation - equipment - 3,000 - 1,000 - 2,000
Total Assets ₱ 398,000 ₱ 138,000

Liabilities and Stockholder's Equity


Current Liabilities
Accounts payable 28,000 12,000 ₱ 16,000
Income tax payable 6,000 8,000 - 2,000
Long-term liabilities
Bonds payable 130,000 20,000 110,000
Stockholders' equity
Common stock 70,000 50,000 20,000
Retained earnings 164,000 48,000 116,000
Total liabilities and stockholders equity ₱ 398,000 ₱ 138,000
Change in
Account Balance
Increase/Decrease

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
Purchase of Building 120,000
f. Equipment 25,000
Purchase of Equipment 25,000
g. Sale of Equipment 4,000
Loss on disposal of plant asset 3,000
Equipment 7,000
h. Operating - Increase in Accounts Payable 16,000
Accounts Payable 16,000
i. Income Taxes Payable 2,000
Operating - Decrease in income taxes payable 2,000
j. Financing - Issuance of common stock 20,000
Common Stock 20,000
k. Operating - Depreciation expense for buildings 6,000
Accumulated Depreciation - Buildings 6,000
l. Operating - Depreciation expense for equipment 3,000
Accumulated Depreciation - Equipment 3,000
m. Increase in retained earnings due to net income 145,000
Retained Earnings 145,000
n. Net Income 29,000
Financing - Payment of Dividends 29,000
o. Cash 22,000
Increase in cash 22,000
524,000 524,000
Lan Services Incorporated
Worksheet
Statement of Cash Flows for the Year Ended December 31, 2020
Reconciling Items
Balance 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 7,000 28,000
Total 144,000 413,000
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 3,000 4,000
Common Stock 50,000 20,000 70,000
Retained Earnings 48,000 29,000 145,000 164,000
Total 144,000 413,000

Statement of Cash Flow 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 tax 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 524,000 502,000
Increase in cash 22,000
Totals 524,000 524,000

You might also like