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1. The following is a list of accounts appearing in the books of Monday Machine Works. The
firm is on its second year of operation ending December 31, 2012. Identify the financial
statement and the section where they should appear by using the following letter choices:
a. balance sheet-current assets
e. balance sheet-owners equity
b. balance sheet-non-current assets f. income statement-revenues
c. balance sheet-current liabilities
g. income statement-expenses
d. balance sheet-non-current liabilitiesh. capital statement
1) Insurance expense
G
2) Five-year, 10% Bonds Payable D
14) Notes Receivable
A
3) Machineries B
15) Notes Payable due April 30, 2015 C
4) Repair Fees Revenue F
16) Utilities Expense
G
5) Marketable Securities A
17) Gas and Oil Expense
G
6) Supplies Expense
G
18) Trucks
B
7) Accounts Payable
C
19) Salary Expense
G
8) Salaries and Wages G
20) Professional Fees Revenue
F
9) Marquez, Capital-January 1, 2012 E21) Taxes Payable
C
10) Cash On Hand and In Bank A
22) Notes Receivable due December 31, 2012 A
11) Deposit for Containers A
23) Accounts Receivable
A
12) Prepaid Insurance
A
24) Commission Fees Revenue F
13) Rent Expense
G
25) Marquez, Drawing
E
2. Triple Strike, owned and managed by Mr. Brook showed owners equity as at Jan. 1, 2012 of
P100,000. At Dec. 31, 2012 total assets amounted to P320,000 and total liabilities
amounted to P160,000.
a. How much was net income or net loss if Brook did not make any additional investment
or withdrawal? 60,000
b. How much was net income or net loss if Brook made a cash withdrawal of P25,000?
85,000
c. How much was net income or net loss if Brook made an additional investment of
P80,000? 20,000 Net Loss
d. How much was net income or net loss if Brook made an additional investment of
P50,000 and a cash withdrawal of P30,000? 40,000
Use the following format as guide. Fill in the known items, solve
a)
b)
Brook, Capital Jan 1
100,000
100,000
Additional investment
0
0
Add Net Income (Less Net Loss)
60,000
85000
Total
160,000
185000
Less Drawings
(0)
(25000)
Brook, Capital Dec 31
160,000
160,000

for the missing items:

c)
d)
100,000
100,000
80,000
50,000
(20,000)
40,000
160,000
190,000
(0)
(30,000)
160,000
160,000

3. The following are selected financial information for Milky Way as of Dec. 31, 2013:

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a. liabilities P340,000 of which P220,000 is evidenced by a three year note;
b. equity, P560,000 of which P300,000 is in cash, the balance in equipment
c. asset is made up of cash
?
, Due from customers P25,000 and Supplies P15,000.
Required: Prepare the balance sheet as of Dec. 31, 2013.
4. Identify how each of the following transactions affect the financial statements. Decreases
should be in open and close parentheses. The first transaction is shown as a guide.
Income
Balance Sheet
Statement
Cash Flow
Transactions
1 Owner invests P50,000 cash in
business
2. Receives cash of P5,000 for services
provided.
3 Pays cash for employee wages
1,500
4 Incurs legal expenses on credit
P2,000.
5 Borrows cash by signing longterm note payable P50,000
6 Owner withdraws cash P7,500
7. Buys furniture and signs a note
after 50%
down payment of
P10,000.
8 Provides services on credit,
P8,000.
9 Buys office equipment for cash,
P12,000
10 Collects 50% cash from credit of
clients.
Totals

Total
Assets

Total
Liabiliti
es

Revenu
es
(Expens
es)

Operatin
g
Activitie
s

5,000

5,000

5,000

(1,500)

(1,500)

(1,500)

50,000

Total
Equity

Investin
g
Activitie
s

50,000

2,000

(2,000)

50,000
(7,500)
1,000

Financin
g
Activitie
s
50,000

50,000
(7,500)

(7,500)

10,000

(10,000
)

8,000

8,000
12,000
4,000

105,00
0

12,000

42,500

9,500

7,500

2,000

92,500

5. The following are the balances of the ledger accounts of Marcelo Transport Services owned
and operated by Ronnie Marcelo, after a year of operation ending March 31, 2013:
Supplies Expense
P
8,000
Passenger Fares Earned
P2,460,000
Transport Buses
17,300,000
Utilities Expense
140,000
Cash
153,500
Tools
875,000
Gas & Oil Expense
150,000
Prepaid Insurance
115,000
Accounts Payable
23,400
Cargo Fares Earned
125,900
Notes Payable (due 2018)
2,550,000
Rent Expense
120,000
Depreciation Expenses
585,400
Marcelo, Capital April 1, 2012
4,647,700
Mortgage Payable (due 2020)
9,885,000
Salary Expense
450,000
Salaries Payable
4,500
Interest Expense
70,000
Repairs & Maintenance
88,000
Insurance Expense
11,250
Marcelo, Drawing
15,000
Tools Expense
14,750
Furniture & Fixtures
180,500
Office Supplies Unused
5,500
Required: Prepare an income statement, Statement of Changes in Equity and Balance Sheet
6. Key Financial figures for Crispy Fries fiscal year ended June 30, 2013 follow:
In Thousands
Liabilities
P210,487

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Net income
Revenues
Owners Equity

33,478
491,549
300,000

Required:
a. What is the total amount of assets invested in Crispy Fries? Ans: 510,487
b. What is its return on assets? Its assets at June 30, 2013 equal P553,000 and owners
equity equal P250,000. ???
c. How much are total expenses for Crispy Fries?
Ans: 458,071

7. Mrs. Gallardo established her business on January 1, 2011. The Information below
pertains to her business on December 31, 2011, AHG Travel Agency.
Cash
200,000
Accounts Receivable
200,000
Notes Receivable
25,000 Office Supplies
25,000
Equipment
40,000 Furniture and Fixtures
25,000
Accounts Payable
20,000 Salaries and wages Payable
10,000
Utilities Payable
42,000 Loans Payable
103,000
Mortgage Payable
110,000
AHG, Capital
100,000
AHG, Withdrawals
65,000 Agency Service Fee
490,000
Rent Expense 75,000 Advertising Expense
25,000
Salaries and wages
175,000
Utilities expense
30,000
1) What is the net income of AHG Travel agency on December 31, 2011? Ans: A
A. 185,000 B. 175,000
C. 155,000
D. 165,000
2) What is the Ending Balance of Capital on December 31, 2011? Ans: A (35,000 based on
computation)
A. 220,000 B. 210,000
C. 190,000
D. 200,000
3) What is the total current asset on December 31, 2011? Ans: A
A. 450,000 B. 355,000
C. 345,000
D. 350,000
4) What is the total asset of AHG Travel Agency? Ans: A
A. 515,000 B. 490,000
C. 480,000
D. 485,000
5) What is the total current liability of AHG Travel Agency? Ans: A
A. 72,000
B. 68,000
C. 58,000
D. 62,000
6) What it the total non-current liability and capital of AHG Travel Agency? Ans: A (313,000
based on computation)
A. 213,000 B. 212,000
C. 232,000
D. 223,000
7) What is the total liability of AHG Travel Agency? Ans: D
A. 295,000 B. 280,000
C. 290,000
D. 285,000

No 3. Answer

Milky Way

Asset:
Cash
AR
Supplies
Equipment
Liability
AP
NP

900,000
600,000
25,000
15,000
260,000
900,000
120,000
220,000
340,000
560,000

Equity

Balance Sheet
Assets
Cash
600,000
AR
25,000
Supplies
15,000
Equipment
26,000
Total Assets: 900,000
Liabilities
Accounts Payable
Notes Payable

Equity
Milky way, Capital

120,000
220,000
340,000

560,000

Total Liability and Equity 900,000

No. 5 Answer
Marcelo Transport Services
Statement of Comprehensive Income
Revenue
Passenger Fares Earned
Cargo Fares Earned

Expenses:
Supplies Expense
Gas and Oul Expense

2,460,000
125,900
2,585,900

8,000
150,000

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Repairs and Maintenance
Utilities Expense
Rent Expense
Salary Expense
Interest Expense
Insurance Expense
Tools Expense
Depreciation Expense
Net Income

88,000
140,000
120,000
450,000
70,000
11,250
14,750
585,400

1,637,400
948,500

Balance Sheet
Assets:
Current Assets
Cash
Prepaid Insurance
Office Supplies Unused
Total Current Assets:
Non Current Assets
Furnitures and Fixture
Depreciation Expense
Transport Buses
Tools
Total Non Current Assets
Total Assets

153,500
115,000
5,500
274,000

180,000
(585,400)
17,300,000
875,000
17,770,100
18,355,500
18,044,100

Liabilities and Owners Equity

Current Liabilities
Accounts Payable
23,400
Salaries Payable
4,500
Total Current Liabilities
27,900

Non Current Liabilities

Notes Payable (Due 2018)
Mortgage Payable (Due 2020)
Total NCL:
Total Liabilities

2,550,000
9,885,000
12,435,000
12,462,900

Equity
Marcelo, Capital April 1, 2012 4,647,700
Less: Marcelo, Drawing
(15,000)
Total Equity:
4,632,700
Income:
948,500
Total Liabilities and Equity
18,044,100