SAMPLE: Financial Statements for a service business*

Statement of Profit or Loss (Natural form)

Action Services Notes to Financial Statements
Statement of Profit or Loss 1 Rent Income ₱ 60,000
for the year ended December 31, 2023 Interest Income 2,500
Other income ₱ 62,500
Note
Revenues 2 Depreciation Expense - Building ₱ 30,000
Service Revenue ₱ 1,320,000 Depreciation Expense - Office Furniture 15,000
Other income** 1 62,500 ₱ 1,382,500 Depreciation Expense - Office Equipment 8,100
Depreciation Expense ₱ 53,100
Costs and expenses***
Salaries Expense ₱ 600,000 * This sample is intended to assist learners in the presentation of financial statements for a service
Utilities Expense 480,000 business. The accounts included are not exhaustive.
Transportation and Travel Expense 81,000 ** Other income includes revenue which is not from main line of business.
Interest Expense 80,000 *** Expenses, except for Miscellaneous Expenses and Interest Expense, are normally listed
Depreciation Expense 2 53,100 according to magnitude i.e., from highest to lowest amount.
Doubtful Accounts Expense 45,000 **** If net loss, then show as negative amount.
Office Supplies Expense 5,500
Miscelaneous Expense 36,000
Interest Expense 1,000 (1,381,600)
Net income**** P 900

Statement of Changes in Owner's Equity: with net income Statement of Changes in Owner's Equity: with net loss
Action Services Action Services
Statement of Changes in Owner's Equity Statement of Changes in Owner's Equity
for the year ended December 31, 2023 for the year ended December 31, 2023

A. Xion, Capital, January 1, 2023 ₱ 1,485,100 A. Xion, Capital, January 1, 2023 ₱ xxx
Net income 900 A. Xion, Drawing (xxx)
Sub-total 1,486,000 Net loss (xxx)
A. Xion, Drawing (40,000) A. Xion, Capital, December 31, 2023 ₱ xxx
A. Xion, Capital, December 31, 2023 ₱ 1,446,000
Statement of Financial Position (Report form) Notes to Financial Statements (continued)
Action Services 3 Accounts Receivable ₱ 400,000
Statement of Financial Position Allowance for Doubtful Accounts (60,000) ₱ 340,000
as of December 31, 2023 Notes Receivable 50,000
Interest Receivable 1,000
Note Trade and other receivables ₱ 391,000
Assets
Current Assets* 4 Prepaid Insurance Expense ₱ 72,000
Cash ₱ 663,600 Office Supplies 16,000
Trade and other receivables 3 391,000 Prepaid expenses ₱ 88,000
Prepaid expenses** 4 88,000 ₱ 1,142,600
5 Land ₱ 500,000
Non-Current Assets Building ₱ 1,000,000
Property, plant, and equipment*** 5 1,487,400 Accumulated Depreciation - Building (90,000) 910,000
Total assets ₱ 2,630,000 Office Furniture ₱ 75,000
Accumulated Depreciation - Office Furniture (22,500) 52,500
Liabilities**** and Owner's Equity Office Equipment ₱ 45,000
Current Liabilities Accumulated Depreciation - Office Equipment (20,100) 24,900
Trade and other payables 6 ₱ 484,000 Property, plant, and equipment ₱ 1,487,400
Loans Payable - current portion 100,000 ₱ 584,000
6 Accounts Payable ₱ 94,000
Non-Current Liabilities Salaries Payable 100,000
Loans Payable - Non-current portion ₱ 400,000 Utilities Payable 40,000
Long Term Notes Payable 200,000 600,000 Interest Payable 70,000
Total Liabilities ₱ 1,184,000 Unearned Service Revenue***** 180,000
Trade and other payables ₱ 484,000
Owner's Equity
A. Xion, Capital 1,446,000
Total liabilities and owner's equity ₱ 2,630,000

* Current Assets are listed in order of liquidity (its nearness to cash).

** Prepayments that are expected to be used within the next 12 months should be classified as Current Assets.
Prepayments that are expected to be used beyond one year should be classified as Non-Current Assets.
*** PPE items are listed in order of estimated useful life, with the longest life first.
**** Liabilities are listed in order of liquidity (or due dates), if can be provided.
***** Unearned Revenue maybe presented as a separate line item under current liabilities.
Precollections that are expected to be earned within the next 12 months should be classified as Current Liabilities.
Precollections that are expected to be earned beyond one year should be classified as Non-Current Liabilities.