REQUIREMENTS:

1. Prepare the Income Statement and the Statement of Financial Position

2. Make a horizontal analysis and vertical analysis on the Income Statement and the Statement of Financial Position

Profit is divided in 60:40 ratio

All figures below are in thousands of Pesos

current year
debit credit
Accrued Liabilities 2,300
Accumulated Depreciation - Building 27,000
Accumulated Depreciation - Equipment 2,200
Accumulated Depreciation - Land Improvements 15,900
Administrative Expenses 5,888
Advances to employees 12
Allowance for doubtful accounts 320
Building 50,000
Cash in Banks 17,335
Cash on Hand 1,230
Cost of Sales 43,251
Current Claims Receivable 39
Equipment 12,704
Income Tax Payable 1,700
Income Taxes Expense 6,932
Insurance and other Prepayments 123
Intangible Assets 1,000
Interest Expense 4,200
Interest Payable 3,150
Inventories 2,397
Investment Properties 10,477
Land 40,000
Land Improvements 32,868
Net Sales 72,608
Notes Payable - Long-term 30,780
Other current assets 1,560
Other Current Liabilities 2,193
Other income 6,618
Other Noncurrent Assets 2,515
Other current receivables 2,146
Other Noncurrent Liabilities 8,184
Prepaid Rental 269
Rivera, Withdrawals 9,588
Rivera, Capital 40,180
Royalties and other revenues 12,864
Selling Expenses 15,646
Santos, Capital 27,017
Santos, Withdrawals 8,760
Short-term Debt 8,309
Short-term bank deposits 900
Trade Accounts Receivable 5,981
Trade Payables 10,022
Unearned Revenue 5,148
Unused office supplies 672
276,493 276,493

-
Statement of Financial Position

below are in thousands of Pesos

previous year
debit credit
3,380
25,250
1,800
13,700
6,154
8
292
50,000
13,534
2,015
35,640
46
12,704
1,800
7,353
198
1,150
3,000
2,120
2,521
10,678
40,000
33,056
63,890
38,000
1,540
3,156
7,409
2,300
1,519
6,724
251
5,615
31,973
12,618
14,613
27,262
7,500
 4,312
850
4,075
9,720
3,668
754
257,074 257,074

-
 Rivera and Sontos Partnership
Trial Balance
For the Year 2020-2021
amounts are in thousand
2021 2020
ACCOUNT TITLES
DEBIT CREDIT DEBIT
Cash on Hand 1,230 2,015
Cash in Banks 17,335 13,534
Short-term bank deposits 900 850
Trade Accounts Receivable 5,981 4,075
Current Claims Receivable 39 46
Other current receivables 2,146 1,519
Allowance for doubtful accounts 320
Advances to employees 12 8
Inventories 2,397 2,521
Unused office supplies 672 754
Insurance and other prepayments 123 198
Prepaid Rental 269 251
Other current assets 1,560 1,540
Intangible Assets 1,000 1,150
Investment Properties 10,477 10,678
Building 50,000 50,000
Accumulated Depreciation - Building 27,000
Equipment 12,704 12,704
Accumulated Depreciation - Equipment 2,200
Land 40,000 40,000
Land Improvements 32,868 33,056
Accumulated Depreciation - Land Improvements 15,900
Other Noncurrent Assets 2,515 2,300
Trade Payables 10,022
Accrued Liabilities 2,300
Income Tax Payable 1,700
Interest Payable 3,150
Unearned Revenue 5,148
Short-term Debt 8,309
Other Current Liabilities 2,193
Notes Payable - Long-term 30,780
Other Noncurrent Liabilities 8,184
Rivera, Capital 40,180
Santos, Capital 27,017
Rivera, Withdrawals 9,588 5,615
Santos, Withdrawals 8,760 7,500
Royalties and other revenues 12,864
Other income 6,618
Net Sales 72,608
Cost of Sales 43,251 35,640
Selling Expenses 15,646 14,613
Administrative Expenses 5,888 6,154
Income Taxes Expense 6,932 7,353
Interest Expense 4,200 3,000
TOTAL 276,493 276,493 257,074
 Rivera and Santos Partnership Rivera and Santos
Income Statement Statement of Chan
For the Year Ended 2020 For the Year En
mounts are in thousand amounts are in thousand
2020 Net Sales 63,890 Rivera-60%
CREDIT Less:Cost of Sales (35,640) Beg, Capita
Operating Income 28,250 Less: With
Royalties and Other Income 12,618 Balances
Other Income 7,409 Profit Shar
Gross Profit 48,277 Ending Par
Less: General Expenses
Selling Expenses 14,613
292 Administrative Expen 6,154
Interest Expense 3,000 (23,767)
Income Before Tax 24,510
Income Taxes Expense (7,353)
Net Income after tax 17,157

Rivera and Santos Partnership Rivera and Santos

Income Statement Statement of Chan
For the Year Ended 2021 For the Year En
25,250 amounts are in thousand
Net Sales 72,608 Rivera-60%
1,800 Less:Cost of Sales (43,251) Beg, Capita
Operating Income 29,357 Less: With
Royalties and Other Income 12,864 Balances
13,700 Other Income 6,618 Profit Shar
Gross Profit 48,839 Ending Par
9,720 Less: General Expenses
3,380 Selling Expenses 15,646
1,800 Administrative Expen 5,888
2,120 Interest Expense 4,200 (25,734)
3,668 Income Before Tax 23,105
4,312 Income Taxes Expense (6,932)
3,156 Net Income after tax 16,173
38,000
6,724 Horizontal Analysis for year 2020-2021
31,973 in amount in percentage
27,262 Net Sales 8,718 14%
Less:Cost of Sales (7,611) 21%
Operating Income 1,107 4%
12,618 Royalties and Other 246 2%
7,409 Other Income (791) -11%
63,890 Gross Profit 562 1%
Less: General Expenses
Selling Expenses 1,033 7%
 Administrative Expen (266) -4%
Interest Expense 1,200 40%
Income Before Tax (1,405) -6%
257,074 Income Taxes Expens 421 -6%
Net Income after ta (984) -6%

Vertical Analysis for year 2020-2021

Yer 2020 Year 2021
Net Sales 100% 100%
Less:Cost of Sales -56% -60%
Operating Income 44% 40%
Royalties and Other 20% 18%
Other Income 12% 9%
Gross Profit 76% 67%
Less: General Expenses
Selling Expenses 23% 22%
Administrative Expen 10% 8%
Interest Expense 5% 6%
Income Before Tax 38% 32%
Income Taxes Expens -12% -10%
Net Income after ta 27% 22%
Rivera and Santos Partnership Rivera and Santos Partnership
Statement of Changes in Equity Statement of Financial Position
For the Year Ended 2020 For the Year Ended 2020

Rivera-60%
Santos- 40% Total Current Assets:
31,973 27,262 59,235 Cash on Hand
(5,615) (7,500) (13,115) Cash in Banks
26,358 19,762 46,120 Short-term bank deposits
### 6,862.80 17,157 Trade Accounts Receivable
36,652 26,625 63,277 Current Claims Receivable
Other current receivables
Allowance for doubtful accounts
Advances to employees
Inventories
Unused office supplies
Insurance and other prepayments
Prepaid Rental
Other current assets
Non Current Assets:
Rivera and Santos Partnership Intangible Assets
Statement of Changes in Equity Investment Properties
For the Year Ended 2021 Building
Accumulated Depreciation - Building
Rivera-60%
Santos- 40% Total Equipment
40,180 27,017 67,197 Accumulated Depreciation - Equipment
(9,588) (8,760) (18,348) Land
30,592 18,257 48,849 Land Improvements
9,703.80 6,469.20 16,173 Accumulated Depreciation - Land Improvements
40,296 24,726 65,022 Other Noncurrent Assets
TOTAL ASSETS

Current Liabilities:
Trade Payables
Accrued Liabilities
Income Tax Payable
Interest Payable
Unearned Revenue
Short-term Debt
Other Current Liabilities
Non Current Liabilities:
Notes Payable - Long-term
Other Noncurrent Liabilities
TOTAL LIABILITIES

Partners Equity:
Rivera, Capital 2020
Santos, Capital 2020
TOTAL PARTNERS EQUITY 2020
TOTAL LIABILITIES AND PARTNERS EQUITY
 tos Partnership Rivera and Santos Partnership
nancial Position Statement of Financial Position
r Ended 2020 For the Year Ended 2021

Current Assets:
2,015 Cash on Hand
13,534 Cash in Banks
850 Short-term bank deposits
4,075 Trade Accounts Receivable
46 Current Claims Receivable
1,519 Other current receivables
(292) Allowance for doubtful accounts
8 Advances to employees
2,521 Inventories
754 Unused office supplies
198 Insurance and other prepayments
251 Prepaid Rental
1,540 27,019 Other current assets
Non Current Assets:
1,150 Intangible Assets
10,678 Investment Properties
50,000 Building
(25,250) Accumulated Depreciation - Building
12,704 Equipment
(1,800) Accumulated Depreciation - Equipment
40,000 Land
33,056 Land Improvements
and Improvements (13,700) Accumulated Depreciation - Land Improvements
2,300 109,138 Other Noncurrent Assets
136,157 TOTAL ASSETS

Current Liabilities:
9,720 Trade Payables
3,380 Accrued Liabilities
1,800 Income Tax Payable
2,120 Interest Payable
3,668 Unearned Revenue
4,312 Short-term Debt
3,156 28,156 Other Current Liabilities
Non Current Liabilities:
38,000 Notes Payable - Long-term
6,724 44,724 Other Noncurrent Liabilities
72,880 TOTAL LIABILITIES

Partners Equity:
36,652 Rivera, Capital 2021
26,625 Santos, Capital 2021
63,277 TOTAL PARTNERS EQUITY 2020
136,157 TOTAL LIABILITIES AND PARTNERS EQUITY
-
 tos Partnership Statement of Financial Position Horizontal Analysis for year 20
nancial Position
r Ended 2021 in amount in percentage
Current Assets 5,325 20%
Non Current Assets (4,674) -4%
1,230 Total Assets 651 0%
17,335
900 Current Liabilities 4,666 17%
5,981 Non Current Liabilities (5,760) -13%
39 Total Liabilities (1,094) -2%
2,146
(320) Rivera Capital 3,644 10%
12 Santos Capital (1,899) -7%
2,397 Total Partners equity 1,745 3%
672
123
269 Statement of Financial Position Horizontal Vertical Analysis for
1,560 32,344
2020 2021
1,000 Current Assets 20% 24%
10,477 Non Current Assets 80% 76%
50,000 Total Assets 100% 100%
(27,000)
12,704 Current Liabilities 21% 24%
(2,200) Non Current Liabilities 33% 28%
40,000 Total Liabilities 54% 52%
32,868
and Improvements (15,900) Rivera Capital 27% 29%
2,515 104,464 Santos Capital 20% 18%
136,808 Total Partners equity 46% 48%
TOTAL LIAB. & PARTNERS EQU 100% 100%

10,022
2,300
1,700
3,150
5,148
8,309
2,193 32,822

30,780
8,184 38,964
71,786

40,296
24,726
65,022
136,808
-
ntal Analysis for year 2020-2021

in percentage

ntal Vertical Analysis for year 2020-2021

REQUIREMENTS:
1. Prepare the Income Statement (2020 & 2019) , Statement of Financial Position (2020 & 2019) and Statement
of Cash Flows (2020)

2. Make ratio analyses for 2020 as follows:

a. liquidity
b. profitability
c. solvency

Additional Information:
1. Dividends declared were P1.5M and P1M for the years 2020 and 2019 respectively.
2. The dividends are paid the year following the declaration

All figures below are in thousands of Pesos

2020 2019
Accounts Payable 27,546
Accounts Receivable 125,880 97,670
Accrued income 3,643 4,143
Accrued expense 5,045
Accumulated Depreciation 30,342
Allowance for Bad debts 18,421
Bad Debts Expense 9,767
Cash in Bank 111,550 108,516
Cash on Hand 8,650 9,460
Cost of sales 312,993 559,885
Deficit 133,027 140,233
Dividend Payable 1,500
Freight-out 100,364 86,570
Income tax expense 3,731 3,278
Income tax payable 933
Intangible assets 416,300 359,500
Interest Expense 21,606 21,265
Other Expenses 23,515 22,750
Petty Cash Fund 100 104
Prepaid expenses 4,321 3,301
Property, Plant and Equipment 395,760 245,760
Repairs Expense - Store Equipment 1,540 1,680
Sales 978,530
Sales Commission 185,230 216,394
Sales Discounts 91,030 79,000
Sales-Salaries Expense 109,870 100,405
Share Capital 640,000
Share Premium 487,000
Short-term debt 36,000
Store Depreciation 14,770 14,770

Total 2,063,880 2,225,317 2,084,451

fs - 161,437
is
cf
& 2019) and Statement
INCOME STATEMENT

Net Sales
Sales
Sales Discount
Total Net Sales
Cost of sales
Gross Profit

Less: Selling Expenses

sands of Pesos Sales Commission
2019 Sales-Salaries Expense
18,123 Store Depreciation
Freight-out
Repairs Expense - Store Equipment
4,553
20,120 Total Selling Expenses
10,623
Less: Operating Expenses
Office Supplies Expense
Office Salaries Expense
Office Depreciation
Bad Debts Expense
1,000 Other Expenses
Total Operating Expenses
Net Income Operating Income
820 Interest Expense
Net Income before Interest and taxes
Income Taxe Expense

STATEMENT OF CHANGES IN SHAREHOLDERS'S EQUITY

Share Share
1,224,764 Capital Premium

Beginning Balance (2019) 540,000.00 357,000.00

Issuance of Additional Shares at Premium - -
540,000 Profit
357,000 Dividends declared
44,000 Adjustment
Ending Balances 540,000.00 357,000.00

Share Share
2,221,003 Capital Premium
- 136,552 Beginning Balance (2020) 640,000.00 487,000.00
Issuance of Additional Shares at Premium - -
Profit
Dividends declared
Adjustment
Ending Balances 640,000.00 487,000.00
EMENT STATEMENT OF FINANCIAL POSITION

2019 2020
Current Assets:
1
1,224,764 978,530 2
79,000 91,030 3
1,145,764 887,500
559,885 312,993
585,879 574,507 Non Current Assets:
4

216,394 185,230
100,405 109,870
14,770 14,770 TOTAL ASSETS
86,570 100,364
1,680 1,540 Current Liabilities
5
419,819 411,774

22,964 13,210 Non Current Liabilities

71,888 72,877
6,500 6,500
9,767 12,588 Total Liabilities
22,750 23,515 Shareholders Equity
133,869 128,690
32,191 34,043
21,265 21,606
10,926 12,437
3,278 3,731 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

EHOLDERS'S EQUITY
Notes to Statement of Financial Position:

Retained Note 1. CASH & CASH EQUIVALENTS

Earnings Total

(140,233.00) 756,767.00
-
7,648.00 7,648.00
(1,000.00) (1,000.00) Note 2. Trade and Other Receivables
1,000.00 1,000.00
(132,585.00) 764,415.00

Retained Note 3. Prepayments and Other Receivables

Earnings Total
(132,585.00) 994,415.00
-
8,706.00 8,706.00 Note 4. Property, Plant and Equipment
(1,500.00) (1,500.00)
1,058.00 1,058.00
(124,321.00) 1,002,679.00

Note 5. Trade and Other Payables

 STATEMENT OF FINANCIAL POSITION

2019 2020
Current Assets:
Cash & Cash Equivalents 118,080 120,300
Trade & Other Receivables 87,047 107,459
Pre-payment & Other Current Assets 7,444 7,964
Inventorie-end 35,500 46,562
Total Current Assets 248,071 282,285
Non Current Assets:
Property, Plant and Equipment 225,640 365,418
Notes Receivables 49,700 49,700
Intangible Assets 359,500 416,300
Total Non Current Assets 634,840 831,418
TOTAL ASSETS 882,911 1,113,703

Current Liabilities
Trade and other Payables 23,496 33,524
Short Term Debt 44,000 36,000
Dividend Payable 1,000 1,500
Total Current Liabilities 68,496 71,024
Non Current Liabilities
Long Term Debt 50,000 40,000
Total Non Current Liabilities 50,000 40,000
Total Liabilities 118,496 111,024
Shareholders Equity
Share Capital 540,000 640,000
Share Premium 357,000 487,000
Deficit (132,585) 124,321
Total Shareholders Equity 764,415 1,251,321
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 882,911 1,362,345

Notes to Statement of Financial Position: 2019 2020

Note 1. CASH & CASH EQUIVALENTS

Cash in Bank 108,516 111,550
Cash on Hand 9,460 8,650
Petty Cash Fund 104 100
Total 118,080 120,300

Note 2. Trade and Other Receivables

Accounts Receivable 94,670 125,880
Allowance for Bad debts (10,623) (18,421)
Total 84,047 107,459

Note 3. Prepayments and Other Receivables

Accrued income 4,143 3,643
 Prepaid expenses 3,301 4,321
Total 7,444 7,964

Note 4. Property, Plant and Equipment

Property, Plant and Equipment 245,760 395,760
Accumulated Depreciation (20,120) (30,342)
Total 225,640 365,418

Note 5. Trade and Other Payables

Accounts Payable 18,123 27,546
Accrued expense 4,553 5,045
Income tax payable 820 933
Total 23,496 33,524
 STATEMENT OF CASH FLOWS

For the Year 2020

CASH FLOWS FROM OPERATING ACTIVITIES

2,220 Net Income
20,412 Add: Depreciation
520 Adjustment
11,062 Adjusted Net Income

Increase (Decrease) in Currents Assets

139,778 Trade & Other Receivables
- Inventories
56,800 Pre-payments & Other Current Assets
Increase (Decrease) in Currents Liabilitites
Trade and Other Payables
Net Cash used by Operating Activities

10,028 CASH FLOWS FROM INVESTING ACTIVITIES

(8,000) Increase of property, plant and equipment
500 Increase on Investment properties
Increase on Notes Receivable
NET CASH FLOWS USED IN INVESTING ACTIVITIES
(10,000)
CASH FLOWS FROM FINANCING ACTIVITY
Paid Dividends
Decrease in Short-Term Debt
100,000 Long Term Debt
130,000 NET CASH FLOW FROM FINANCING ACTIVITY
256,906
NET Increase (Decrease) in Cash
CASH AT BEGINNING OF THE YEAR

CASH AT END OF THE YEAR

150,000
 FLOWS
RATIOS ANALYSIS
0

LIQUIDITY RATIO
8,706 Current Assets
10,222 Less: Current Liabilities
231,058 Working Capital
249,986
Current Assets
Divided by: Current Liabilities
(20,412) Current ratio
(11,062)
(520) Current Assets-Inventories-P
Divided by: Current Liabilities
10,028 Quick Ratio
228,020
Sales on Account
Divided by: Average Trade Rec
(150,000) Receivable Turnover
(56,800)
0 Days in a Year
-206,800 Divided By: Receivable Turnov
Collection Period

(1,000) Cost of Sales

(8,000) Divided by: Average Inventori
-10,000 Inventory Turnover
(19,000)
Days in a year
2,220 Inventory Turnover
118,080 Days Sale Outstanding/Invento

120,300

Profitability Ratio
Net Income Before Interest &
Divded by: Average Total Asse
Return on Assets

Net Income after Taxes

Net Sales
Return on Sales

Gross Profit
Net Sales
Profit Margin
Solvency Ratios
Total Liabilities
Total Assets
Debt to Assets

Total Liabilities
Total Shareholder's Equity
Debt to Equity

Net Income before Interest an

Interest Expense
Times Interest Earned
ATIOS ANALYSIS

282,285
- 71,024
211,261

282,285
71,024
4 :2

291,015
71,024
4 :1

978,530
14,105
69.37 times

365
69.37
5.26 days

312,993
41,031
7.63 times

365
7.63
47.84 days

12,437
998,307
1.2%

8,706
887,500
1.0%

574,507
887,500
65%
 111,024
1,113,703
10% :1

111,024
1,002,679
11% :1

12,437
21,606
0.58 times