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Ariel Palay 3/12/ BSA 3 MW 1:30 – 3:COLLEGE OF BUSINESS AND ACCOUNTANCYPROBLEM - FINANCIAL STATEMENT PRESENTATIONThe comparative pre-closing adjusted trial balances of Entity A on December 31, 2022 are shown below:2021 2022Accounts Dr./(Cr.) Dr./(Cr)Cash- Collecting Officer 30,000 30,Cash-Treasury/A...

Description

Ariel Palay BSA 3

3/12/21 MW 1:30 – 3:00 COLLEGE OF BUSINESS AND ACCOUNTANCY

PROBLEM - FINANCIAL STATEMENT PRESENTATION The comparative pre-closing adjusted trial balances of Entity A on December 31, 2022 are shown below: 2021 Accounts

Dr./(Cr.)

Cash- Collecting Officer

30,000

Cash-Treasury/Agency Dep. Reg.

290,000

Accounts Receivable

2022 Dr./(Cr) 30,000 250,000

80,000

120,000

Allowance for Impairment -A/R

(5,000)

Office Supplies Inventory

20,000

Buildings

800,000

800,000

Accumulated Depreciation -Buildings

(650,000)

(680,000)

Office Equipment

340,000

660,000

Accumulated Depreciation - Office Equipment

(180,000)

Accounts Payable

(60,000)

Due to BIR

(20,000)

Due to GSIS

(4,000)

Due to Pag-ibig

(2,000)

Due to PhilHealth

(1,000)

Accumulated Surplus/Deficit

(160,000)

(333,000)

Tax on Delivery Vans and Trucks

(40,000)

(50,000)

Waterworks System Fees

(192,000)

(240,000)

Subsidy from NG

(934,000)

(1,167,000)

Salaries and Wages, Regular

303,000

380,000

PERA

16,000

20,000

Office Supplies Expense

104,000

130,000

(180,000) (90,000)

Water Expenses

16,000

Electricity Expenses

48,000

Telephone Expenses

32,000

40,000

Janitorial Expenses

64,000

80,000

Security Expenses

80,000

Depreciation-Bldgs & Other Structures

24,000

30,000

Depreciation - Machinery & Equipment

16,000

20,000

Impairment loss- Loans & Receivables

20,000 60,000

100,000

5,000

TOTALS * Hint: Recall that the "Cash Treasury/Agency Deposit, Regular" account is closed directly to the " Accumulated Surplus Deficit" account. In the statement of changes in net assets/equity, this is presented under the " adjustment of net revenue recognized directly in net assets/equity" line item.

Additional Information:

a. Entity A received NCA of P 1,050,000 in 2022. Unused NCA reverted at year-end amounted to P43,000 b. The unbilled tax revenues were collected in cash c. All collections of revenues, billed and unbilled, were remitted to the National Treasury. d. Taxes withheld in 2022 on payments of: - Personnel Services, P90,000 - Maintenance and Other Operating Expenses P20,000 - Purchase of Inventories P10,000 - Purchase of office equipment P20,000 e. Salary deductions for contributions to GSIS. Philhealth and Pag-ibig in 2022 amounted to P60,000 f. Taxes withheld and other salary deductions are aggregated and presented under the "inter agency payable" line item. g. Only the purchase of office supplies inventory affected the accounts payable in 2022. h. For simplicity, assume there are no basis, timing or entity differences between "budgeted amounts" and "actual amounts on a comparable basis". The following are relevant to the preparation of the statement of comparison of budget and actual amounts.

Budgeted and Actual Receipts

I. Original Budgeted Receipts The total original budgeted receipts amount to P 300,000. This is sourced from the 2022 Budget of Expenditures and Sources of Financing. It constitutes the projected revenues/receipts for the following:

Tax Revenue

P 40,000

Services and Business Income

260,000

II - Final Budgeted Receipts (There are no adjustments to the original budget)

III - Actual Receipts on Comparable Basis The total actual receipts on a comparable basis amount to P250,000. This is based on the Consolidated Actual Revenue Collections per FAR No. 5, Statement of Financial Performance and Statement of Cash Flows. It constitutes the actual collections/receipts from tax revenue and services and business income that will accrue to the General Fund and Special Account in the General Fund.

Budgeted and Actual Payments

IV. Original Budget The original budget for payments of PS, MOOE and CO amounts to P1,200,000. This is based on the Current Year's Appropriations, sourced from the Statement of Appropriations, Allotments, Obligations, Disbursements and Balances (FAR No.1). It consists of the following:

Personnel Services Maintenance and Other Operating Expenses Capital Outlay

P 420,000 480,000 300,000

V - Final Budget The final budget amounts to P 1,200,000. This include a P20,000 realignment from PS to CO.

VII - Actual Payments The actual payments for PS, MOOE and CO, based on the Disbursements for payment of Current Year's Obligations (from current year and Continuing Appropriations) sourced from FAR No. 1 consist of the following:

Personnel Services

P 400,000

Maintenance and Other Operating Expenses

450,000

Capital Outlay

320,000

Requirements: a. Prepare a comparative statement of financial position showing cross-references to the notes for the following line items: 1. Receivables 2. Property, Plant, and Equipment 3. Inter-agency Payables

b. Prepare a comparative statement of financial performance showing cross-references to the notes for the following line items: 4. Personnel Services 5. Maintenance and Othe Operating Expenses 6. Non-cash Expenses

c. Prepare a comparative statement of changes in net assets/equity. d. Prepare the 2022 statement of cash flows e. Prepare the 2022 statement of comparison of budget and actual amounts. f. Prepare comparative partial notes showing the breakdowns of the cross-referenced line items.

ENTITY A STATEMENT OF FINANCIAL POSITION ALL FUNDS AS AT DECEMBER 31,2022 Note 2022

2021

ASSETS Current Assets Cash and Cash Equivalents Receivables Inventories Total Current Assets Non-Current Assets Property, Plant and Equipment Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Financial Liabilities Inter-Agency Payables Total Current Liabilities Total Liabilities Total Assets less Total Liabilities NET ASSETS/EQUITY Accumulated Surplus/(Deficit) Total Net Assets/Equity

30,000 115,000 20,000 165,000

30,000 80,000 110,000

600,000 600,000 765,000

310,000 310,000 420,000

90,000 90,000 90,000

60,000 27,000 87,000 87,000

1

2

3

675,000

333,000 675,000 675,000

333,000 333,000

ENTITY A STATEMENT OF FINANCIAL PERFORMANCE ALL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 Note Revenue Tax Revenue Service and Business Income Total Revenue Less: Current Operating Expenses Personnel Services Maintenance and Other Operating Expenses Non-Cash Expenses Total Current Operating Expenses Surplus/(Deficit) from Current Operations Net Financial Assistance/Subsidy Surplus/(Deficit) for the period

4 5 6

2022

2021

50,000 240,000 290,000

40,000 192,000 232,000

400,000 430,000 35,000 865,000

319,000 344,000 40,000 703,000

(575,000) 1,167,000 592,000

(471,000) 934,000 463,000

ENTITY A STATEMENT OF CASH FLOWS ALL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 2022 Cash Flows from Operating Activities Cash Inflows Receipt of Notice of Cash Allocation Collection of Income/Revenues Total Cash Inflows Cash Outflows Remittance to National Treasury Payment of Expenses Remittance of Personnel Benefit Contribution and Mandatory Deductions Reversal of Unutilized NCA Total Cash Outflows Net Cash Provided by (Used in) Operating Activities

1,210,000 250,000 1,460,000

410,000 640,000 67,000 43,000 1,160,000 300,000

Cash Flows from Investing Activities Cash Inflows Total Cash Inflows Cash Outflows Purchase/Construction of Property, Plant and Equipment Total Cash Outflows Net Cash Provided by (Used in) Investing Activities Cash Flows from Financing Activities Cash Inflows Total Cash Inflows Cash Outflows Total Cash Outflows Net Cash Provided by (Used in) Financing Activities Increase (Decrease) in Cash and Cash Equivalents Effects of Exchange Rate Changes on Cash and Cash Equivalents Cash and Cash Equivalents, January 1 Cash and Cash Equivalents, December 31

-

300,000 300,000 (300,000)

30,000 30,000

ENTITY A STATEMENT OF CHANGES IN NET ASSETS/EQUITY ALL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022

Balance at January 1 Add/(Deduct): Changes in accounting policy Prior period errors Other adjustments Restated balance Add/(Deduct): Changes in Net Assets/Equity for the Calendar Year Surplus/(Deficit) for the period Adjustment of net revenue recognized directly in net assets/equity* Others** Balance at December 31

Accumulated Surplus/Deficit 2022 2021 333,000 160,000 333,000

160,000

592,000

463,000

(250,000) 675,000

(290,000) 333,000

*Net revenue deposited with the National Treasury (revenue including constructive receipt of income by Foreign Based Agencies and income remitted by agencies thru TRA) **Direct adjustments to Net Assets/Equity which are not revenues or expenses (e.g. transfer of PPE from of the agency to another directly charged to Accumulated Surplus/(Deficit)) This statement should be read in conjunction with the accompanying notes.

COMPARISON OF BUDGET AND ACTUAL AMOUNT ALL FUNDS FOR THE YEAR ENDED DECEMBER 31, 2022 (in thousand pesos) Particulars

Budgeted Amounts

Original

Final

Actual Amount Comparable Basis

RECEIPT Tax Revenue Services and Business Income Total Receipts

40 260 300

40 260 300

50 200 250

PAYMENTS Personnel Services Maintenance and Other Operating Expenses Capital Outlays Total Payments

420 480 300 1,200

400 400 480 450 320 320 1,200 1,170

30

NET RECEIPTS/PAYMENTS

(900)

(900)

20

(920)

Difference Final Budget and Actual

(10) 60 50

30

ENTITY A [Consolidated] Financial statements for the year ended December 31, 2022

Note 1

2

2022

2021

Receivables Loans and Receivable Accounts Accounts Receivable Allowance for Impairment-A/R Total Loans and Receivable Accounts

120,000 (5,000) 115,000

80,000 80,000

Total Receivables

115,000

80,000

Property, Plant & Equipment Buildings and Other Structures Buildings Accumulated Depreciation-Buildings Total Buildings and Other Structures

800,000 (680,000) 120,000

800,000 (650,000) 150,000

Machinery and Equipment Office Equipment 660,000 Accumulated Depreciation-Equipment (180,000) Total Machinery and Equipment 480,000

3

4

340,000 (180,000) 160,000

Total Property, Plant & Equipment

600,000

310,000

Inter-Agency Payables Inter-Agency Payables Due to BIR Due to GSIS Due to Pag-IBIG Due to Philhealth Total Inter-Agency Payables

-

20,000 4,000 2,000 1,000 27,000

Total Inter-Agency Payables

-

27,000

Personnel Services Salaries and Wages Salaries and Wages-Regular 380,000 Total Salaries and Wages 380,000 Other Compensation PERA 20,000 Total Other Compensation 20,000 Total Personnel Services 400,000

303,000 303,000 16,000 16,000 319,000

5

Maintenance and Other Operating Expenses Supplies and Materials Expenses Office Supplies Expenses Total Supplies and Materials Expenses

130,000 130,000

104,000 104,000

Utility Expenses Water Expenses Electricity Expenses Total Utility Expenses

20,000 60,000 80,000

16,000 48,000 64,000

Communication Expenses Telephone Expenses Total Communication Expenses

40,000 40,000

32,000 32,000

General Services Janitorial Services Security Services Total General Services

80,000 100,000 180,000

64,000 80,000 144,000

Total Maintenance and Other Operating Expenses 430,000 6

Non-Cash Expenses Depreciation Depreciation-Buildings and Other Structures 30,000 Depreciation-Machinery and Equipment Total Depreciation 30,000 Impairment Loss Impairment Loss-Loans and Receivables 5,000 Total Impairment Loss 5,000 Total Non-Cash Expenses 35,000

344,000

24,000 16,000 40,000 40,000...