1 4

2 2
3 1
4 1
5 2
6 3
7 2
8 4
9 0
10 3
No. Date DR CR Explanation DR CR
1 1 Inventory 40,000.00
2 Income Summary 40,000.00
3 To adjust Inventory.
4
5 2 Office Supplies Expense 8,000.00
6 Office Supplies 8,000.00
7 To adjust Office Supplies.
8
9 3 Depreciation Expense 20,000.00
10 Accumulated Depreciation 20,000.00
11 To adjust Depreciation
12
13 4 Interest Expense 200.00
14 Interest Payable 200.00
15 To adjust interest expense
16 20,000 x 6% x 2/12
17
18
19
20
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22
23
24
25
26
27
28
29
30
31
32
33
34
35
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43
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70
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72
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75
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80
81
82
83
84
85
 Problem 1 Co
Statement of Financial Performance
For the year ended December 31, 2020

Net Sales
Sales 500,000.00
Less: Sales Discounts 20,000.00 480,000.00
Cost of Goods Sold
Inventory, 1/1/2020 50,000.00
Add: Net Purchases 160,000.00
Less: Inventory, 12/31/2020 40,000.00 170,000.00
Gross Profit 310,000.00
Operating Expenses
Freight out 15,000.00
Interest Expense 200.00
Rent Expense 120,000.00
Utilities Expense 60,000.00
Depreciation Expense 20,000.00
Office Supplies Expense 8,000.00 223,200.00
Net Income 86,800.00
 Problem 1 Co.
Statement of Changes in Equity
For the Year Ended December 31, 2020

Owners, Capital, 01/01/2020 245,000.00

Add: Profit 86,800.00
Less: Witdrawal -
Owners, Capital, 12/31/2020 331,800.00
 Problem 1 Co.
Statement of Financial Position
As of December 31, 2020

Current Assets
Cash 150,000.00
Accounts Receivable 100,000.00
Inventory 40,000.00
Office Supplies 2,000.00 292,000.00
Non Current Assets
Equipment 200,000.00
Less: Accumulated Depreciation 60,000.00 140,000.00
TOTAL ASSETS 432,000.00

Current Liabilities
Accounts Payable 80,000.00
Notes Payable 20,000.00
Interest Payable 200.00 100,200.00

Owners, Capital 12/31/2020 331,800.00

Total Liabilities and Owner's Equity 432,000.00
No. Date DR CR Explanation DR CR
1 1 Income Summary 50,000.00
2 Inventory 50,000.00
3 To close inventory beginning
4
5 2 Income Summary 413,200.00
6 Freight in 20,000.00
7 Freight out 15,000.00
8 Interest Expense 200.00
9 Rent Expense 120,000.00
10 Utilities Expense 60,000.00
11 Sales Discounts 20,000.00
12 Purchases 150,000.00
13 Office Supplies Expense 8,000.00
14 Depreciation Expense 20,000.00
15 To close debit nominal accounts
16
17 3 Sales 500,000.00
18 Purchase Returns and Allowances 10,000.00
19 Income Summary 510,000.00
20 To close credit nominal accounts
21
22 4 Income Summary 86,800.00
23 Owners, Capital 86,800.00
24 To close income summary
25
26 5
27
28 To close drawings/withdrawal
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
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45
46
47
48
49
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60
61
62
63
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66
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69
70
71
72
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76
77
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79
80
81
82
83
84
85
 A B C
CASE 1
Share in Profit 151,000.00 216,000.00 133,000.00
Ending Capital 321,000.00 466,000.00 463,000.00

CASE 2
Share in Profit 84,727.27 79,727.27 35,545.45
Ending Capital 254,727.27 329,727.27 365,545.45

CASE 3
Share in Profit 44,000.00 39,000.00 17,000.00
Ending Capital 214,000.00 289,000.00 347,000.00

CASE 4
Share in Profit 15,000.00 25,000.00 (90,000.00)
Ending Capital 185,000.00 275,000.00 240,000.00
No. Date DR CR Explanation DR CR
1 1/4/2020 Subscription Receivable 115,000.00
2 Subscribed Ordinary Shares 100,000.00
3 Share Premium 15,000.00
4 To record subscription
5
6 Cash 23,000.00
7 Subscription receivable 23,000.00
8 To record the downpayment
9
10 2/5/2020 Cash 22,000.00
11 Oridnary Shares 20,000.00
12 Share Premium 2,000.00
13 To record issuance for cash
14
15 6/30/2020 Treasury Share 8,000.00
16 Cash 8,000.00
17 To record Treasury Shares
18
19 Retained Earnings-unappropriated 8,000.00
20 Retained Earnings- Appropriated 8,000.00
21 To record legal appropriation
22
23 8/31/2020 Cash 46,000.00
24 Subscription Receivable 46,000.00
25 To record collection of SR
26
27 Subscribed Ordinary Shares 50,000.00
28 Ordinary Shares 50,000.00
29 To record issuance
30
31 9/15/2020 Retained Earnings- Unappropriated 52,500.00
32 Share Dividends Distributable 52,500.00
33 To record Share Dividend
34 525 shares x 100
35
36 12/1/2020 Share Dividend Distributable 52,500.00
37 Ordinary Shares 52,500.00
38 To record issuance of shares
39
40 12/15/2020 Retained Earnings- iunappropriated 26,250.00
41 Cash Dividends Payable 26,250.00
42 To record cash dividend
43 2,625 shares x P10.00
44
45 12/31/2020 Income Summary 200,000.00
46 Retained Earnings- unappropriated 200,000.00
47
48
49
50
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Outstanding Shares 2,625.00
Check computation

Retained Earnings- Unappropriated 2,113,250.00

Retained Earnings- Appropriated 8,000.00
Total Retained Earnings 2,121,250.00
 Complicated Corporation
Statement of Shareholders' Equity
As of December 31, 2020

Share Capital
Ordinary Shares 222,500.00
Subscribed Ordinary Shares 50,000.00
Less: Subscription Receivable 46,000.00
Share Premium 67,000.00 293,500.00
Retained Earnings
Retained Earnings- Appropriated 8,000.00
Retained Earnings- Unppropriated 2,113,250.00 2,121,250.00
Total Share Capital and Retained Earnings 2,414,750.00
Less: Treasury Shares 8,000.00
Total Shareholders' Equity 2,406,750.00
CASE 1 A B C Total
Salary 60,000.00 120,000.00 180,000.00
Interest 10,000.00 15,000.00 20,000.00 45,000.00
Bonus 32,000.00 32,000.00 (NI-S)x .10
balance 81,000.00 81,000.00 81,000.00 243,000.00 500,000-180,000-45,000-32,000
Total 151,000.00 216,000.00 133,000.00 500,000.00
Capital before Profit 170,000.00 250,000.00 330,000.00 750,000.00
Endinf Capital 321,000.00 466,000.00 463,000.00 1,250,000.00

CASE 2 A B C Total
Salary 60,000.00 50,000.00 110,000.00
Interest 10,000.00 15,000.00 20,000.00 45,000.00
Bonus 8,181.82 8,181.82
balance 14,727.27 14,727.27 7,363.64 36,818.18
Total 84,727.27 79,727.27 35,545.45 200,000.00
Capital before Profit 170,000.00 250,000.00 330,000.00 750,000.00
Endinf Capital 254,727.27 329,727.27 365,545.45 950,000.00

CASE 3 A B C Total
Salary 60,000.00 50,000.00 110,000.00
Interest 10,000.00 15,000.00 20,000.00 45,000.00
Bonus 10,000.00 10,000.00
balance (26,000.00) (26,000.00) (13,000.00) (65,000.00)
Total 44,000.00 39,000.00 17,000.00 100,000.00
Capital before Profit 170,000.00 250,000.00 330,000.00 750,000.00
Endinf Capital 214,000.00 289,000.00 347,000.00 850,000.00

CASE 4 A B C Total
Salary 60,000.00 120,000.00 180,000.00
Interest 10,000.00 15,000.00 20,000.00 45,000.00
Bonus - -
balance (55,000.00) (110,000.00) (110,000.00) (275,000.00)
Total 15,000.00 25,000.00 (90,000.00) (50,000.00)
Capital before Profit 170,000.00 250,000.00 330,000.00 750,000.00
Endinf Capital 185,000.00 275,000.00 240,000.00 700,000.00

100,000.00 200,000.00 200,000.00 500,000.00

0.20 0.40 0.40

Issued Subscribed Treasury Outstanding

Beginning 1,000.00 1,000.00
1/4/2020 1,000.00 2,000.00
 2/5/2020 200.00 2,200.00
6/30/2020 100.00 2,100.00
8/31/2020 500.00 (500.00) 2,100.00 525.00
9/15/2020 2,100.00
12/1/2020 525.00 2,625.00
2,225.00 500.00 100.00
000-180,000-45,000-32,000

NI after Salary 90000