ANVIL-SONDE CONSTRUCTION CORPORATION ANVIL-SONDE CONSTRUCTION CORPORATION

INCOME STATEMENT INCOME STATEMENT

For the period ended July 31,2010 For the period ended July 31,2010

Revenues: Construction Revenue 7,400,000

Construction Revenue P 7,400,000 Less: Cost of Construction Materials P 2,250,000

Architectural Service Revenue   263,000 Gross Profit 5,150,000

Total Revenues 7,663,000

Less:Cost and Expenses:

Cost and Expenses: Salaries Expense 480,000

Bad Debts Expense 120,000
Cost of Construction Materials P 2,250,000
Transportation Expense 15,450
Salaries Expense 480,000
Depreciation Expense 25,000
Bad Debts Expense 120,000
Office Supplies Expense 2,950
Transportation Expense 15,450
Utilities Expense 10,300
Depreciation Expense 25,000
Taxes and Licenses 15,400
Office Supplies Expense 2,950
Miscellaneous Expense   6,850
Utilities Expense 10,300
Total Costs and Expenses P 675,950
Taxes and Licenses 15,400
Net Income from Operations 4,474,050
Interest Expense 9,000 Add:Architectural Service Revenue 263,000
Miscellaneous Expense   6,850 Less:Interest Expense 9,000
Total Costs and Expenses P 2,934,950

Net Income P 4,728,050 Net Income P 4,728,050

 Sales 10,000
less: Sales returns and allowances (100)
Sales Discount (200)
Net sales 9,700
Less: Cost of Goods Sold
Merchandise Inventory, beginning 2,000
Add: Purchases(including freight in) 1,500
Less: Purchase Discounts (100)
Purchase returns and allowances (200)
s
ood Cost of Goods Available for sale 3,200
g
s ol d Less: Merchandise Inventory, end (700) 2,500
Un GROSS MARGIN 7,200
Less: Operating Expenses
Marketing and Selling 1,000
General and Administrative 1,500 2,500
Operating Income 4,700
Add: Other Income 300
Less: Other expense (200)
Net income 4,800
Sales 1,000 100%
Cost of Goods Sold 800 80%
Gross Margin 200 20%
Operating Expenses 150 15%
Net income 50 5%
Terms to research on
• Freight in (asset)
• Freight out (expense)
• Debit memo
• Credit memo
• Operating cycle
• Periodic inventory system
• Perpetual inventory system
• FOB shipping point
• FOB destination
• Sales tax
• Trade discounts
 WESLEY VENTURES PARTNERSHIP
Balance Sheet
As of July 31, 2010
ASSETS
Current Assets
Cash P 12,498
Accounts Receivable 16,850
Merchandise Inventory 94,320
Prepaid Advertising 5,000
Total Current Assets P 128,668

Property, Plant and Equipment

Office Equipment P 35,500
Less: Accum Depn - Office Equip't. (2,500)
Store Equipment 62,000
Total Property, Plant and Equipment 95,000
TOTAL ASSETS P 223,668

LIABILITIES
Accounts Payable P 50,000
Accrued Interest Expense 1,250
Total Current Liabilties P 51,250

EQUITY
Paid-up Capital P 150,000
Add: Net income, ending 11/30/08 22,418
Total Equity P 172,418

TOTAL LIABILITIES AND EQUITY P 223,668

 CLOSING ENTRIES

 journal entries that bring temporary accounts to zero balance

and transfer their balances to the permanent capital account.

 prevent the mixing of revenues, expense and withdrawal

accounts of one period to the next accounting period.

Steps:
1. Close revenue accounts to Income Summary.
2. Close expense accounts to Income Summary.
3. Close Income Summary to Capital account.
4. Close Drawing to Capital account.

**Close beginning inventory (for merchandising)

ILLUSTRATION:
Cash 10,000
Accounts Receivable 100,000
Allowance for Doubtful Accounts 1,000
Unused Supplies 100
Accounts Payable 25,000
Unearned Interest Income 200
Lee Kage, Capital 40,000
Lee Kage, Drawing 2,000
Salary Expense 124,000
Service Income 190,050
Supplies Expense 400
Rent Expense 16,000
Doubtful Accounts 750
Interest Income 1,000
Accrued Salary Payable 4,000
Rent Deposit 8,000
 Post-closing Trial Balance
 Trial balance prepared after the closing
entries.

 Trial balance of real accounts.

 Basis for the opening entry into the new

books of accounts.