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Financial Statement: Seatwork and PreQuiz#1 CARLA AUTO REPAIR SHOP ADJUSTED TRIAL BALANCE December 31, 2017 Debit Cash on Hand Cash in Bank Accounts Receivable Allowance for Bad Debts Notes Receivable Interest Receivable Prepaid Insurance Prepaid Supplies Machinery and Equipment Accu. Depr. – Machinery & Equipment Furniture and Fixtures Accu. Depr. – F&F Accounts Payable Notes Payable Interest Payable Taxes Payable Bella, Capital Bella, Personal Repair Income Referral Income Interest Income Depr. Expense – Machinery & Equip. Depr. Expense – F & F Doubtful Accounts Insurance Expense Salaries Expense Supplies Expense Rent Expense Taxes and Licenses Expense Utilities Expense Interest Expense Totals

P

Credit

25,000 45,000 49,000 P 4,900 30,000 450 5,000 200 150,000 7,500 25,000 2,250 P 26,000 50,000 750 130 132, 850 5,000 275,000 15,000 450

P

7,500 2,250 4,900 10,000 45,000 400 55,000 7,380 46,750 1,000 514,830

P

514,830

Required: (10pts each) 1. Prepare a single step income statement with aggregate for Depreciation and for Other Expenses, Prepare supporting notes. Other Expenses should include utilities, rent, bad debts and supplies. 2. Prepare a statement of owner’s equity 3. Prepare a properly classified report form of statement of financial position with an aggregate for Property, Plant and Equipment and for Current liabilities. Prepare supporting notes. Answer the following questions: (5pts each) 1. Determine if the business is profitable, liquid and solvent. 2. By just looking at the cash collections and payments is the venture liquid? 3. Verify, if the income reported is correct. By preparing a detailed income statement and capital statement explain the changes in the owner’s capital.

CARLA AUTO REPAIR SHOP Statement of Financial Performance December 31, 2017 Revenues Repair Income Referral Income Total Income Less: Operating Expenses Salaries Expense Insurance Expense Depreciation Expense – net (Note 1) Taxes and Licenses Expense Other Expenses (Note 2) Total Operating Expenses Operating Income Add: Interest Income Less: Interest Expense NET INCOME

P275,000.00 15,000.00 P290,000.00 P45, 000.00 10,000.00 9, 750.00 7,380.00 107,050.00 P179,180.00 P110,820.00 450.00 1,000.00 P110,270.00

CARLA AUTO REPAIR SHOP Statement of Changes of Owner’s Equity For the year ended December 31, 2017 Bella, Capital – Beginning Add: Net Income Total Less: Bella, Personal Bella, Capital - Ending

P132,850.00 110,270.00 243,120.00 5,000.00 P238,120.00

CARLA AUTO REPAIR SHOP Statement of Financial Position For the year ended December 31, 2017 ASSETS Current Assets Cash on Hand Cash in Bank Accounts Receivable Allowance for Bad Debts Notes Receivable Interest Receivable Prepaid Insurance Prepaid Supplies Total Current Assets

P25,000.00 45,000.00 49,000.00 (4,900.00) 30,000.00 450.00 5,000.00 200.00 P149,750.00

Noncurrent Assets Property, Plant and Equipment (Note 3) Total Noncurrent Assets

P165,250.00 P165,250.00

TOTAL ASSETS

P315,000.00

LIABILITIES AND OWNER’S EQUITY Current Liabilities Trade and Other Payables (Note 4) Total Current Liabilities

P76,880.00 P76,880.00

Owner’s Equity Bella, Capital - Ending Total Owner’s Equity

P238,120.00 P238,120.00

TOTAL LIABILITIES AND OWNER’S EQUITY

P315,000.00

Note 1 Depreciation Expense – Machinery & Equip. Depreciation Expense – F & F Note 2 Doubtful Accounts Supplies Expense Rent Expense Utilities Expense Note 3 Machinery and Equipment Accu. Depr. – Machinery & Equipment Furniture and Fixtures

P7,500.00 2,250.00 P9,750.00 P4,900.00 400.00 55,000.00 46,750.00 P107,050.00 150,000.00 7,500.00 25,000.00

Accu. Depr. – F&F Note 4 Accounts Payable Notes Payable Interest Payable Taxes Payable

2,250.00 P165,250.00 P 26,000.00 50,000.00 750.00 130.00 P76,880.00...