Republic of the Philippines

BATANGAS STATE UNIVERSITY

The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

SEMESTRAL PROJECT
FM 101

Directions: Analyze the given problem and show your detailed computation. Show your
solution as clearly as possible.

1. Tippy’s Company started the business one year back, and during the year ended
December 31, 2018, it generated revenue by selling merchandise of Php 21,080. The
cost of goods sold was 8,670. It has also generated income from other sources by
providing a music lesson for 2,550. The annual depreciation charge comes to 1,700.
In addition, the company paid wages of 640, rent of 425, interest on a loan of 450,
supplies expense of 475, and utility expense of 340. The management of Tippy’s
Company wants to know the Net Income position of the company. Therefore, prepare
the Statement of income for the year ended December 31, 2018.

Answer:
Tippy’s company
Income Statement
For the years ended Dec 31,2018
Income
Sales Revenue 21,080
Service Income 2,550
Total Revenue Php 23,630

Operating Expenses
COGS 8,670
Depreciation Expense 1,700
Salary Expense 640
Rent Expense 425
Interest Expense 450
Supplies Expense 475
Utility Expense 340
Total Operating Expense Php
12,700
Net Income Php
10,930
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

2. From the following particulars, prepare a balance sheet of Mr. Cruz at 31st March
2021: Capital Php 550,000
Drawings 10,000
Sundry Debtors 100,000
Sundry Creditors 80,000
Loan from Bank 20,000
Net profit 160,000
Closing Stock 150,000
Plant and Machinery 150,000
Building 120,000
Land 300,000
Goodwill 50,000
Furniture and Fixtures 30,000

Answer:
Balance Sheet
Mr. Cruz
As of March 21, 2021
Assets
Current Assets
Sundry Debtors 100,000
Closing Stock 150,000
Total Current Assets Php 150,000

Non-current Assets
Plant and Machinery 150,000
Building 120,000
Land 300,000
Goodwill 50,000
Furniture and Fixtures 30,000
Total Non-current Assets Php 650, 000
Total Assets Php
800,000

Liabilities
Current Liabilities
Sundry Creditors 80,000
Total current liabilities Php 80,000
Non-current liabilities
Loan from Bank 20,000
Total non-current liabilities Php 20,000
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

Total Liabilities Php 100,000

Net Assets Php

700,000

Equity
Capital 550,000
Drawings 10,000
Net profit 160,000
Total Equity Php
700,000

3. The cost of goods sold for Linge Inc. is Php 10,000, and the average inventory cost is
Php 5,000. Calculate the inventory turnover ratio.

Answer:
Inventory Turnover Ratio = COGS for the year / Average inventory cost
= 10,000 / 5,000
= Php 2.00

4. Boots Inc. is a supplier of heavy machinery spare parts. All its customers are major
manufacturers, and all transactions carry on a credit basis. The net credit sale for
Boots Inc. for the year ended was 1 million and the average receivables for the year
were Php 250,000.

Answer:
Net Credit Sales – 1,000,000
Average Receivable - 250,000

Receivable Turnover Ration = Net Credit Sales / Average

Receivable
= 1,000,000 / 250,000
= Php 4.00
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

5. If a company records 600,000 in sales, its beginning assets are valued at 450,000 and
its ending assets are valued at 1,000,000 in its income statement. An investor seeking
to invest in this company can calculate the company’s assets turnover ratio to
determine if they are efficiently using their assets to make sales.

Answer:
Sales – 600,000
Beginning Assets – 450,000
Ending Assets – 1,000,000

Asset Turnover Ration = net credit sales / Average amount in

Assets
= 600,000 / (450,000 + 1,000,000) / 2
= 600,000 / 725,000
= 0.82758 or 82.76%

6. Assuming Waltermart has 1,000 preferred shareholders who receive annual dividend
payments of 50,000 and they have 120,000 common shareholders. If they do not issue
additional share throughout the year in view and reports a net income after tax of
1,000,000. Calculate Waltermart’s earnings per share.

Answer:
Annual Dividend payment = 50,000
Common Shareholder = 120,000
Net Income After Tax – 1,000,000

Earnings per share = net income per tax – required dividend on payment
= 1,000,000 – 50,000
= 950,000

= earnings avail for common stock / number of shares

of common stock outstanding
= 950,000 / 120,000
= 7.9167

7. – 8. Solve for the Income Statement Ratio. And compare year 1 from year 2, give
your analysis.
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

Answer:

Amount of individual 100

Amount of Base item

Income Statement

Year 1 % Year 2 %

Net Sales $1,000,000 100% $1,110,000

100%
Selling & Administrative Expenses 80,000 8% 110,000
9.41%
Depreciation
Earnings Before Taxes 140,000 14% 45,000
4.05%
Taxes 56,000 5.6% 18,000
1.62%
Net Income 84,000 8.4% 27,000
2.45%

Analysis:
From the table above in the year 1 net income is 8.4 % which is bigger
than the year 2 which is 2.45% net income.

9. Happy Harry has just bought a scratch lottery ticket and won 10,000. He wants to
finance
the future study of his newly born daughter and invests this money in a fund with a
maturity of 18 years offering a promising yearly return of 6%. What is the amount
available on the 18th birthday of his daughter? Calculate future value.

Answer:
Fv – ?
Pv – 10,000
i – 6%
n - 18 years

Fv = Pv (1+i) n
= 10,000 (1+ 0.06) 18
= 10,000 (2.85433)
 Republic of the Philippines
BATANGAS STATE UNIVERSITY
The National Engineering University
Pablo Borbon Campus
Rizal Avenue Ext., Batangas City, Batangas, Philippines 4200
Tel Nos.: (+63 43) 980-0385; 980-0387; 980-0392 to 94; 425-7158 to 62 loc. 1124
E-mail Address: cabeihm.pb@g.batstate-u.edu.ph | Website Address: http://www.batstate-u.edu.ph

College of Accountancy, Business, Economics and International Hospitality Management

= 28,543.3

10. Mr. X wants 10,000 after three years. The interest rate available on a specific investment,
which he is interested in, is 4% per annum. How much he should invest today to
receive the desired amount. Calculate the present value.

Answer:

Pv – ?
Fv – 10,000
i – 4%
n-3

Pv = Fv (1+ i) -n
= 10,000 (1+ 0.04) -3
= 10,000 (0.8889963587)
= 8,889.963587

Prepared By:
Ms. MARLYN T. PANGANIBAN
Course Instructor