The following are taken from the records of ABC Company for the year ended on December 31,

20X2

Sales ₱ 834,985.00 Utilities expense 75,000.00

Purchases 439,990.00 Advertising expense 44,000.00
Interest income 15,444.00 Rent expense 80,000.00
Depreciation expense 30,000.00 Interest expense 25,670.00
Amortization expense 5,000.00 Bad debts expense ?
Salaries expense 90,000.00

Bad debts expense is 2.9282% of sales.

January 1, 20X2 ₱ 35,450.00

December 31, 20X2 ₱ 25,765.00

Additional information:

a. Depreciation of ₱4,500 is for computer equipment used in the administrative office. All other
equipment were used in the store.
b. Amortization is attributed to office leasehold improvements.
c. 50% of salaries are attributed to sales personnel.
d. Utilities for the store represent 40% of utilities expense.
e. Rent for the office space is ₱30,000.
f. Bad debts expense is classified as general and administrative expense.

Requirements:

A. Compute for the following:

1. Net Sales Jhea

2. Net Cost of Purchases Elaine
3. Cost of Goods Sold Kyla
4. Gross Profit Ericka
5. Bad Debts Expense Austin
6. Total General and Administrative Expense Felicity
7. Total Selling and Distribution Expense Trixy
8. Total Operating Expenses
9. Operating Income
10. Net Income

B. Prepare the company’s Statement of Comprehensive Income using multi-step approach.

31, 20X2
A. Compute for the following:

1. Net Sales
Net Sales ₱ 834,985.00

2. Net Cost of Purchases

Net Cost of Purchases ₱ 439,990.00

3. Cost of Goods Sold

Beginning Inventory (January 1, 20X2) ₱ 35,450.00
Add: Net Cost of Purchases 439,990.00
Cost of Goods Available for Sale 475,440.00
Less: Ending Inventory (December 31, 20X2) 25,765.00
Cost of Goods Sold ₱ 449,675.00

4. Gross Profit
Net Sales ₱ 834,985.00
Less: Cost of Goods Sold 449,675.00
Gross Profit ₱ 385,310.00

5. Bad Debts Expense (2.9282% of sales)

Sales ₱ 834,985.00
Rate 0.029282
Bad Debts Expense ₱ 24,450.03

6. Total General and Administrative Expense

Depreciation expense ₱ 4,500.00

Amortization expense 5,000.00
Salaries expense 45,000.00
Utilities expense 45,000.00
Rent expense 30,000.00
Bad debts expense 24,450.03
TOTAL GENERAL AND ADMINISTRATIVE EXPENSE ₱ 153,950.03

7. Total Selling and Distribution Expense

Depreciation expense 25,500.00

Salaries expense 45,000.00
Utilities expense 30,000.00
Advertising expense 44,000.00
Rent expense 50,000.00
 TOTAL SELLING AND DISTRIBUTION EXPENSE ₱ 194,500.00

8. Total Operating Expenses

Total Operating Expenses ₱ 348,450.03

9. Operating Income
Operating Income ₱ 36,859.97

10. Net Income

Net Income ₱ 26,633.97
 ACCOUNTS GAE SDE TOTAL
Depreciation expense 4,500.00 25,500.00 30,000.00
Amortization expense 5,000.00 5,000.00
Salaries expense 45,000.00 45,000.00 90,000.00
Utilities expense 45,000.00 30,000.00 75,000.00
Advertising expense 44,000.00 44,000.00
Rent expense 30,000.00 50,000.00 80,000.00
Bad debts expense 24,450.03 24,450.03
TOTAL ₱ 153,950.03 ₱ 194,500.00 ₱ 348,450.03

B. Prepare the company’s Statement of Comprehensive Income using multi-step approach.

 ABC Company
Statement of Comprehensive Income
For the year ended December 31, 20X2

Net Sales ₱ 834,985.00

Less: Cost of Goods Sold 449,675.00
Gross Profit 385,310.00
Less: Operating Expenses
General and Administrative Expense ₱ 153,950.03
Selling and Distribution Expense 194,500.00 348,450.03
Operating Income 36,859.97
Add: Interest Income 15,444.00
Less: Interest Expense 25,670.00
Net Income ₱ 26,633.97
multi-step approach.