INCOME STATEMENT

CARLA AUTO REPAIR SHOP

INCOME STATEMENT
For the year ended December 31, 2018

Revenue:
Repair Income P275,000
Other Operating Income (note 1) 15,450
Expenses:
Rent Expense P55,000
Utilities Expense 46,750
Salaries Expense 45,000
Depreciation Expense (note 2) 9,750
Other Expenses (note 3) 24,050 (180,550)
Interest Expense (1,000)
Profit for the year P108,900

Note 1: Other Income

Referral Income P 15,000
Interest Income 450
Total P 15,450

Note 2: Depreciation Expense

Depreciation – Machinery & Equipment P 7,500
Depreciation – Furniture & Fixtures 2,250
Total P 9,750

Note 3: Other Expenses

Insurance expense P 10,000
Taxes & Licenses 8,750
Bad Debts Expense 4,900
Supplies Expense 400
Total P 24,050

STATEMENT OF CHANGES IN OWNER’S EQUITY

CARLA AUTO REPAIR SHOP

STATEMENT OF CHANGES IN OWNER’S EQUITY
For the year ended December 31, 2018

Carla, Capital, January 1 P100,000

Additional Investment 32,850
Add Profit 108,900
Total P241,750
Less: Withdrawals 5,000
Carla, Capital December 31 P236,750
STATEMENT OF FINANCIAL POSITION
CARLA AUTO REPAIR SHOP
STATEMENT OF FINANCIAL POSITION
December 31, 2018

ASSETS
Current Assets:
Cash (Note 1) P 70,000
Trade and Other Receivable (Note 2) 74,550
Prepaid Expenses (Note 3) 5,200
Total 149,750
Non-Currents Assets:
Property & Equipment (Note 4) 165,250
Total Assets P 315,000

LIABILITIES AND OWNER’S EQUITY

Current Liabilities:
Trade and Other Payables (Note 5) P 28,250
Owner’s Equity:
Carla, Capital 238,750
Total Liabilities & Owner’s Equity P 315,000

Note 1: Cash
Cash on Hand P25,000
Cash in Bank 45,000
Total P70,000

Note 2: Trade and Other Receivable

Accounts Receivable P49,000
Less: Allowance for Bad Debts 4,900 44,100
Notes Receivable 30,000
Interest Receivable 450
Total P74,550

Note 3: Prepaid Expenses

Prepaid Insurance P5,000
Prepaid Supplies 200
Total P5,200

Note 4: Property & Equipment

Machinery & Equipment P150,000
Less: Accumulated Depreciation 7,500 P142,500
Furniture & Fixtures P25,000
Less: Accumulated Depreciation 2,250 22,750
Total P165,250

Note 5: Trade and Other Payables

Accounts Payable P26,000
Notes Payable 50,000
Interest Payable 750
Taxes Payable 1,500
Total P78,250
STATEMENT OF CASH FLOWS
CARLA AUTO REPAIR SHOP
STATEMENT OF CASH FLOWS
For the year ended December 31, 2018

Cash flows from operating activities:

Collections from customers (schedule 1) P196,000
Collections from referrals made 15,000
Payment for rent (55,000)
Payment for utilities (46,750)
Payment for salaries (45,000)
Payment for insurance (schedule 2) (15,000)
Payment for taxes (schedule 3) (7,250)
Payment for supplies (schedule 4) (600)
Payment for interest expense (schedule 5) (250)
Net cash inflows from operating activities P41,150
Cash flows from investing activities:
Purchase of machinery and equipment (schedule 6) P(124,000)
Acquisition of furniture (25,000)
Net cash outflows from investing activities (149,000)
Cash flows from financing activities:
Investment by the owner P32,850
Cash withdrawals (5,000)
Loan from Republic Finance 50,000 77,850
Decrease in cash (30,000)
Cash, January 1 100,000
Cash, December 31 P70,000

Schedule 1: Repair Income P275,000

Accounts Receivable, Dec. 31 (49,000)
Notes Receivable, Dec. 31 (30,000)
Collections from customers P196,000

Schedule 2: Insurance Expense P10,000

Prepaid Insurance, Dec. 31 5,000
Payment for insurance P15,000

Schedule 3: Taxes and Licenses Expense P8,750

Taxes Payable (1,500)
Payment for Taxes P7,250

Schedule 4: Supplies Expense P400

Prepaid Supplies 200
Payment for supplies P600

Schedule 5: Interest Expense P1,000

Interest Payable (750)
Payment for interest expense 250

Schedule 6: Machinery and Equipment P150,000

Accounts Payable (26,000)
Payment for machinery P124,000