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ENGINEERING ECONOMY

2nd Qtr SY 2016-2017

CASE STUDY CHAPTER 2: FINANCIAL STATEMENTS AND FINANCIAL RATIOS

Name of Enterprise: Cafet Malu


Members: Bagumba, Ivan Harold Mayo, Ronalie Nicole
Gapasin, Danica Sheene Ong, Hanna Alyanna Aihnee
Inagan, Ronalyn

Grading Sheet:
Chapter 2
Default Transactions 10
Trial Balance 10
Income Statement 15
Cash Flow Statement 15
Statement of Retained Earnings 15
Balance Sheet 15
Financial Ratios 10
Overall Presentation 10

1. Enumerate 15 business transactions for your new enterprise. The following are default and should be included:
o Equity
o Revenues. Use cash for some, account receivable for some.
o Expenses. Use cash for some, account payable for some. Include the amount of supplies used. Moreover, allow
for some of the insurance to expire.
o Dividends. Pay out dividends to stockholder/s.
o Accounts Payable. Pay out some of your payables.
o Accounts Receivable. Receive some cash for your receivables.

2. Prepare all the financial statements for the period July 1 to 31, 2016.

3. Calculate all the financial ratios.

Mapua Institute of Technology Page 1 of 7


School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

Students of Mapua Institute of Technology established a small business that serves hand-crafted beverage and
named it Cafet Malu at the beginning of December. The following business transactions are completed for the
remaining month of December:
 Invest Php 150,000 cash to start the business.

 Purchased equipment on account:

 Tables and chairs: Php 10,000

 Utensils: Php 20,000

 Coffee maker: Php 15,000

 Baking Equipments: Php 20,000

 Avail insurance: Php 10000

 Purchased supplies (Ingredients) from Company in Cash: Php 50,000

 Paid the following expenses:

 Utilities (Electricity & Water): Php 15,000

 Received cash for sales for catering service: Php 70,000

 Charged customer for service on account: Php 10000

 Sold Products:

 Coffee (Cappucino, Mocha, Caramel Macchiato, Brewed Coffee, Espresso, Café Latte): Php 59080

 Cakes & Pastries (Red Velvet Cake, Chocolate Chip Cookies, BLT Sandwich, Banana Caramel Loaf): Php
41100

 Pasta (Spaghetti w/ meatballs, Carbonara, Lasagna) : Php 23500

 Paid rent: Php 30000

 Paid wages (Employees): Php 72150

 Insurance that expired: Php 5000

 Paid creditor: Php 15000

 Withdrew cash for personal use: Php 10000

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School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

TRIAL BALANCE

Cafet Malu

December 1-31, 2017

TRANSACTIONS (+) (-)


A. Cash (equity) 150,000
Equity 150,000
B. Payable (Equipments) 65,000
Equipments
Tables & Chairs 10,000
Utensils 20,000
Coffee Maker 15,000
Baking Equipments 20,000
D. Cash (Insurance) 10,000
Insurance 10,000
E. Cash (Supplies) 50,000
Supplies (Ingredients) 50,000
F. Expenses
A. Cash (Utilities) 15,000
G. Cash (Sales)
Catering 70000
Coffee 59080
Cakes & Pastries 41100
Pasta 23500
H. A. Receivables (Sales) 10,000
J. Cash (Rent) 30,000
K. Cash (Wages) 72,150
L. Cash (Insurance) 5,000
N. Cash (Creditor) 5,000
 Payable 15,000
O. Cash (Dividends) 10,000
Dividends 10,000

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School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

CASH FLOW STATEMENT

Cafet Malu

December 1-31, 2017

Cash from investment


Equity 150,000
150,000
Cash from operations

Insurance (10,000)
Supplies (50,000)
Utilities (15,000)
Sales 70,000
Sales 59080
Sales 41100
Sales 23500
Rent (30,000)
Wages (72,150)
Creditor (15000)
Dividends (10000)
(8470)
NET CASH 141530

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School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

INCOME STATEMENT

Cafet Malu

December 1-31, 2017

REVENUE
Sales 70,000
59080
41100
23500
193680
EXPENSES
Utilities 15,000
Rent 30,000
Wages 72,150
Insurance 15000
122150
NET INCOME 81530

STATEMENT OF THE RETAINED EARNINGS

Cuplete Co.

July 1-31, 2016

Initial RE 0
Net income 81,530
Dividends (10000)
FINAL RE 71530

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School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

BALANCE SHEET

Cafet Malu

December 1-31, 2017

ASSETS
Current Assets:
Cash 141,530
A. Receivable 10,000
Supplies 50000
Insurance 10000
(5000)
206530
Fixed Assets:
Equipment 65000
65000
TOTAL ASSETS 271530

LIABILITIES and EQUITY


Current Liabilities:
A. Payable 65000
(15000)
Equity:
Capital Stock 150,000
RE 71530
271530

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School of Chemical Engineering and Chemistry
ENGINEERING ECONOMY
2nd Qtr SY 2016-2017

Financial Ratios:

Liquidity Ratios:

current assets 206530


Current Ratio    4.1306
current liabilitie s 50000
quick assets 206530  (50000  65000)
Acid Test Ratio    1.8306
current liabilitie s 50000

Solvency/Leverage Ratios:

Total Liabilitie s 50000


Debt  to  Equity Ratio    0.2257
Total Equities 221530
Total Liabilitie s 50000
Debt  to  Assets Ratio    0.1841
Total Assets 271530
net income 81530
Re turn on Sales    0.4209
sales 193683
net income 81530
Re turn on Equity    0.3680
total equity 221530

Asset Management Ratios:

Sales 193683
Assets Turnover Ratio    0.7133
Total Assets 271530
Total Equity 221530
Equity Ratio    0.8159
Total Assets 271530

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