TRANSORIENTAL HEAVY EQUIPMENT CENTER, INC.

AUDIT NOTES TRANSORIENTAL HEAVY EQUIPMENT CENTER, INC.

December 31, 2022 December 31, 2022

WP Ref Description Disposition

1
2
3
4
5
6
7
 Err:522
SUMMAY OF ADJUSTING/RECLASIFYING JOURNAL ENTRIES
Err:522

Account W.P Ref. Debit Credit

 Err:522
TRIAL BALANCE
Err:522

W.P. Reference Debit Credit

Petty cash A 2,000.00

PCIB A 45,328.18
China Bank A 7,802.48
FEBTC A 15,781.34
Accounts receivable trade B 2,950,876.38
Accounts receivable others C 7,000.00
Spare parts inventory D 178,954.28
Investment Property F-2 2,300,248.94
Leasehold improvement G 20,481.30
Furniture. Fixtures and equipment G 30,233.75
Accumulated depreciation G 264,077.55
Capital Lease equipment G 3,845,721.87
Preoperating expenses H 46,311.80
Deposits H 37,000.00
Accounts payable trade AA 3,954,729.01
Accrued expense AA 23,457.85
Advances from stockholders BB 250,000.00
Income tax CC 147,854.80
Deferred income DD 52,991.90
Capital stock JJ 3,000,000.00
Retained earnings KK 806,283.71
Retained earnings appropriated for expansion KK 400,000.00
Sales 10 2,900,000.00
Realized income from sale of equipmnent unde contract 10 56,478.24
Income for rent 10 947,304.54
Cost of sales 20 1,746,519.20
RO Depreciation 20-2 514,782.34
RO Travel and transportation 20-2 42,157.81
RO Representation 20-2 28,147.29
RO Reapirs and maintenance 20-2 29,784.94
RO Gas and oil 20-2 64,178.21
RO Rent, light and water 20-2 39,254.28
RO Security fees 20-2 25,178.64
RO Miscellaneous 20-2 12,478.38
AE Salaries 40 185,497.28
AE Advertising 40 25,178.22
AE Gas and oil 40 35,147.28
AE Professional fees 40 27,000.00
AE Representation 40 19,478.82
AE Rent, light and water 40 51,847.28
AE Transportation and travel 40 28,745.11
AE Amortization of preoperating expense 40 29,074.54
AE Postage, telephone and telegram 40 19,874.52
AE Repairs and maintenance 40 39,474.14
AE Depreciation 40 3,349.56
AE Taxes and licenses 40 78,248.27
AE Bank charges 40 6,478.26
AE Supplies 40 5,021.78
AE Miscellaneous 40 4,058.16
FC Interet income 80 12,016.87
FC Interest expense 80 9,574.28
FC Miscellaneous 80 1,487.28
Provision for income tax WPL 255,438.28
12,815,194.47 12,815,194.47
A Cash 70,912.00

3,915,799.65
3,072,015.87
843,783.78

558,473.22
 Err:522
WORKING BALANCE SHEET
Err:522 Net Prior Years'
Per Books Adjustments As Adjusted Balances
Ref W.P. This Year Add (Deduct) 2021

ASSETS

CURRENT ASSETS
Cash A 70,912.00 - 70,912.00 126,472.00
Accounts receivables - -
Trade B 2,950,876.38 2,950,876.38 2,047,654.00
Others C 7,000.00 7,000.00 15,000.00
Inventories (Note 6) D 178,954.28 178,954.28 114,765.00
Total Current Assets 3,207,742.66 - 3,207,742.66 2,303,891.00

NON-CURRENT ASSETS
Investment Property F-2 2,300,248.94 2,300,248.94
Property and equipment - net 6) G 3,632,359.37 3,632,359.37 2,647,148.00
Preoperating expenses 46,311.80 46,311.80 43,612.00
Refundable Deposit 37,000.00 37,000.00 37,000.00
6,015,920.11 - 6,015,920.11 2,727,760.00

9,223,662.77 - 9,223,662.77 5,031,651.00

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable trade and accrued expenses AA 3,978,186.86 3,978,186.86 184,141.00
Advances from stockholders BB 250,000.00 250,000.00 300,000.00
Income taxes EE 147,854.80 147,854.80 288,235.00
Total Current Liabilities 4,376,041.66 - 4,376,041.66 772,376.00

NON-CURRENT LIABILITIES
Loans payable -
Lease liability -
Deferred income GG 52,991.90 52,991.90 52,992.00
52,991.90 - 52,991.90 52,992.00
STOCKHOLDERS' EQUITY 11)
Capital stock JJ 3,000,000.00 3,000,000.00 3,000,000.00
Retained earnings 1,794,629.21 - 1,794,629.21 1,206,283.00
4,794,629.21 - 4,794,629.21 4,206,283.00

9,223,662.77 - 9,223,662.77 5,031,651.00

See accompanying Notes to Financial Statements

- - - - ###
Prior Years'
Balances
Prior Year

104,576.00

1,724,652.00
20,000.00
89,314.00
1,938,542.00

2,048,732.00
72,686.00
18,000.00
2,139,418.00

4,077,960.00

151,910.00
-
252,279.00
404,189.00

31,354.00
31,354.00
3,000,000.00
642,417.00
3,642,417.00

4,077,960.00

-
 Err:522
WORKING PROFIT AND LOSS
Err:522 Net
Per Books Adjustments
Ref W.P. This Year Add (Deduct)

REVENUES
Income from sales 10.00 2,900,000.00
Realized incoem from sale of equipment under contract 56,478.24
Income from rental operation 947,304.54
Total Revenue 3,903,782.78 -

COST
Cost of sales (Note 13) 1,746,519.20
Expenses from rental operation 755,961.89
Administrative expenses 558,473.22
Total Cost and expenses 3,060,954.31 -

INCOME FROM OPERATION 842,828.47 -

OTHER INCOME (CHARGES)

Interest income 12,016.87
Gain (loss) on sale of property
Interest expenses (9,574.28)
Miscellaneous expense (1,487.28)
955.31 -

INCOME BEFORE INCOME TAX 843,783.78 -

PROVISION FOR INCOME TAX (Note 10) 255,438.28

NET INCOME 588,345.50 -

See accompanying Notes to Financial Statements

 Prior Years' Prior Years'
As Adjusted Balances Balances
2021 Prior Year

2,900,000.00 1,800,000.00 1,250,340.00 1,649,660.00

56,478.24 86,762.00 74,018.00 1.32
947,304.54 1,354,673.00 831,456.00
3,903,782.78 3,241,435.00 2,155,814.00

1,746,519.20 1,170,000.00 684,949.00

755,961.89 680,376.00 299,620.00
558,473.22 513,471.00 409,229.00
3,060,954.31 2,363,847.00 1,393,798.00

842,828.47 877,588.00 762,016.00

12,016.87 10,567.00 8,242.00

-
(9,574.28) (8,342.00) (7,625.00)
(1,487.28) (27,712.00) (13,265.00)
955.31 (25,487.00) (12,648.00)

843,783.78 852,101.00 749,368.00 (1,587,440.94)

255,438.28 288,235.00 252,279.00

588,345.50 563,866.00 497,089.00 #REF!

WCS/WCF WCS/WCF
 Err:522
WORKING CHANGES IN EQUITY
Err:522 Net Prior Years' Prior Years'
Per Books Adjustments As Adjusted Balances Balances
Ref W.P. This Year Add (Deduct) 2021 Prior Year

CAPITAL STOCK (Note 12)

Paid in:
Balance at beginning of year JJ 3,000,000.00 3,000,000.00 3,000,000.00 3,000,000.00
Paid in -
Fully paid subscription - -
Balance at end of year 3,000,000.00 - 3,000,000.00 3,000,000.00 3,000,000.00

Subscribed:
Balance at beginning of year - - -
Fully paid subscription - -
Subscriptions during the year - -
Balance at end of year - - - - -

Less subscription receivable:

Balance at beginning of year -
Collections during the year - -
Subscriptuions during the year - -
Balance at end of year - - - - -

- - - - -
RETAINED EARNINGS
Unappropriated
Balance at beginning of year 806,283.71 806,283.71 242,417.00 145,328.00
Net income during the year WPL 588,345.50 588,345.50 563,866.00 497,089.00
Appropriated for working capital - - (400,000.00)
Balance at end of year 1,394,629.21 - 1,394,629.21 806,283.00 242,417.00

Approriated
Balance at beginning of year KK-1 400,000.00 400,000.00 400,000.00 -
Appropriated for working capital - - 400,000.00
Balance at end of year 400,000.00 - 400,000.00 400,000.00 400,000.00

1,794,629.21 - 1,794,629.21 1,206,283.00 642,417.00

4,794,629.21 - 4,794,629.21 4,206,283.00 3,642,417.00

WBS WBS
See accompanying Notes to Financial Statements

PROPOSED AJE
unlocateed difference #REF!
a/p #REF!
 Err:522
WORKING CASH FLOW
Err:522 Prior Years'
As Adjusted Balances
Ref W.P. 2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net income WPL 852,101.00
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation 412,278.00
Amortization of preoperating expenses -
Operating income before working capital changes - 1,264,379.00
Changes in operating assets and liabilities
Decrease (increase) in:
Accounts receivables
Trade (323,002.00)
Others 5,000.00
Inventories (25,451.00)
Increase (decrease) in:
Accounts payable 32,231.00
Income tax -
Advances from stockholders -
Cash generated from operation - 953,157.00
Income taxes paid (including final and withheld taxes) (201,566.00)

Net cash provided by operating activities - 751,591.00

CASH FLOWS FROM INVESTING ACTIVITIES

Addition to property and equipment (Note 7) 1,010,695.00
Movement in investment property
Additions to deposit 19,000.00
Net changes in other non-current assets

Net cash used in investing activities - 1,029,695.00

CASH FLOWS FROM FINANCING ACTIVITIES

Transaction affecting deferred income -
Advances from stockholders 300,000.00
Loans payable
Lease liability

Net cash provided by (used in) financing activities - 300,000.00

NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENT - 21,896.00
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 104,576.00

CASH AND CASH EQUIVALENTS AT END OF YEAR - 126,472.00

See accompanying Notes to Financial Statements

(70,912.00) -
Prior Years'
Balances
2,020

749,368.00

105,879.00
-
855,247.00

195,749.00

15,478.00

(159,510.00)
-

906,964.00
(205,329.00)

701,635.00

604,672.00

7,000.00

611,672.00

89,963.00
 14,613.00

104,576.00

-
CASH AND CASH ITEMS
Net Prior Years' Prior Years'
Per Books Adjustments As Adjusted Balances Balances
Ref W.P. MM/DD/YY Add (Deduct) 2021 MM/DD/YY

Petty cash 2,000.00 2,000.00 126,472.00 104,576.00

PCIB 45,328.18 45,328.18
China Bank A-4 7,802.48 7,802.48 -
FEBTC 15,781.34 15,781.34 -
Dollar account - -
New account - -
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- - NOTES:
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70,912 - 70,912 126,472 104,576 these figures go to WBS
^ ^ ^ ^ ^
DO NOT INSERT any rows ABOVE
TO WBS WBS PRINT AREA IS a1:H53
es go to WBS

NSERT any rows ABOVE

EA IS a1:H53