GENERAL JOURNAL

DATE ACCOUNT TITLES AND EXPLANATION PR DEBIT

2021
January 25 Cash 110 5 0 0 0 0 0 . 00
Pinaubaya, Capital 310
Investment

31 Purchases 152 3 0 0 0 0 0 . 00
Accounts Payable 210
Purchases from Taichi Manufacturing

February 8 Accounts Receivable 130 7 0 0 0 0 . 00

Sales Revenue 510
Sales with invoice number 31183

14 Rent Expense 540 1 5 0 0 0 0 . 00

Cash 110
Paid rent

March 18 Accounts Receivable 130 1 5 7 6 0 0 . 00

Sales Revenue 510
Sales with invoice number 31184

29 Purchases 152 1 5 0 0 0 0 . 00
Accounts Payable 210
Purchases from Taichi Manufacturing

April 15 Accounts Receivable 130 2 5 0 0 0 0 . 00

Sales Revenue 510
Sales with invoice number 31185

30 Salaries Expense 530 1 2 0 0 0 0 . 00

Cash 110
Paid employees' salaries

June 1 No entry to be made

July 8 Pinaubaya, Drawing 320 1 5 5 0 0 0 . 00

Cash 110
Withdrawal

16 Cash 110 4 7 8 0 0 . 00
Accounts Receivable 130
Collection of Accounts Receivable
August 3 Accounts Receivable 130 1 2 0 0 0 0 . 00
Sales Revenue 510
Sales with invoice number 31187

November 8 Accounts Payable 210 1 0 0 0 0 0 . 00

Cash 110
Payment of 2020 account balance

24 Purchases 152 4 5 0 0 0 0 . 00
Accounts Payable 210
Purchases from Taichi Manufacturing

December 18 Accounts Receivable 130 4 8 0 0 0 0 . 00

Sales Revenue 510
Sales with invoice number 31188

19 Notes Payable-ST 220 1 0 0 0 0 0 . 00

Cash 110
Payment of 1/3 of short term notes

24 Cash 110 8 0 0 0 0 . 00
Notes Receivable 140
Collection of all notes receivable due

31 Inventory, End 150 8 2 0 0 0 . 00

Cost of Goods Sold 520 8 9 8 0 0 0 . 00
Purchases 152
Inventory, Beginning 150
Year end inventory count
 Page 1
CREDIT

5 0 0 0 0 0 . 00

3 0 0 0 0 0 . 00

7 0 0 0 0 . 00

1 5 0 0 0 0 . 00

1 5 7 6 0 0 . 00

1 5 0 0 0 0 . 00

2 5 0 0 0 0 . 00

1 2 0 0 0 0 . 00

1 5 5 0 0 0 . 00

4 7 8 0 0 . 00
1 2 0 0 0 0 . 00

1 0 0 0 0 0 . 00

4 5 0 0 0 0 . 00

4 8 0 0 0 0 . 00

1 0 0 0 0 0 . 00

8 0 0 0 0 . 00

9 0 0 0 0 0 . 00
1 8 0 3 0 0 . 00
 SALES JOURNAL Page 1

INVOICE
DATE ACCOUNT DEBITED PR AMOUNT
NUMBER

2021
Feb. 08 Mashima 31183 AR01 70,000.00
Mar. 18 Wataya 31184 AR02 157,600.00
Apr. 15 Ayase 31185 AR03 250,000.00
Aug. 03 Chihaya 31187 AR04 120,000.00
Dec. 18 Mashima 31188 AR01 480,000.00
Dec. 31 Wataya-Adj. AR02 18,900.00
Dec. 31 TOTALS 1,096,500.00
 PURCHASE JOURNAL Page 1

SUPPLIER'S INVOICE PAYMENT

DATE PR AMOUNT
ACCOUNT CREDITED DATE TERMS

2021
Jan. 31 Taichi Mdsg. Jan. 31 AP01 300,000.00
Mar. 29 Taichi Mdsg. Mar. 29 AP01 150,000.00
Nov. 24 Taichi Mdsg. Nov. 24 AP01 450,000.00
Dec. 31 TOTALS 900,000.00
 CASH RECEIPTS JOURNAL
DATE ACCOUNT CREDITED PR EXPLANATION CASH DR.

2021
Jan. 31 Capital Capital investment 500,000.00
Mar. 29 Accounts Receivable Cash collection 47,800.00
Nov. 24 Notes Receivable Cash collection on notes 80,000.00
Dec. 31 TOTALS 627,800.00
RNAL Page 1 C
ACCOUNTS NOTES
OTHERS CR. DATE
RECEIVABLE CR. RECEIVABLE CR.

2021
500,000.00 Jan. 31
47,800.00 Apr. 30
80,000.00 Jul. 08
47,800.00 80,000.00 500,000.00 Nov. 08
Dec. 19
Dec. 31
 CASH DISBURSEMENTS JOURNAL
ACCOUNTS
ACCOUNT DEBITED PR EXPLANATION CASH CR.
PAYABLE DR.

Rent Expense Rental payment 150,000.00

Salaries Expense Employee salary paid 120,000.00
Withdrawal Cash withdrawal 155,000.00
Accounts Payable Cah payment 100,000.00 100,000.00
Notes Payable-ST Cash payment on notes 100,000.00
TOTALS 625,000.00 100,000.00
 Page 1

NOTES PAYABLE
OTHERS DR.
DR.

150,000.00
120,000.00
155,000.00

100,000.00
100,000.00 425,000.00
 CASH
Beginning 150,000.00 150,000.00 Feb. 14
Jan. 25 500,000.00 120,000.00 Apr. 30
Jul. 16 47,800.00 155,000.00 Jul. 8
Dec. 24 80,000.00 100,000.00 Nov. 8
100,000.00 Dec. 19
Total 777,800.00 625,000.00 Total
Unadjusted Bal. 152,800.00
Adjustments -
For com
Adjusted Bal. 152,800.00
postclosin
FS bala
closing
MARKETABLE SECURITIES necessary
Beginning 20,000.00 is almos
Unadjusted Bal. 20,000.00 balance i
Adjustments -
Adjusted Bal. 20,000.00

ACCOUNTS RECEIVABLE
Beginning 145,500.00 47,800.00 Jul. 16
Feb. 8 70,000.00
Mar. 18 157,600.00
Apr. 15 250,000.00
Aug. 3 120,000.00
Dec. 18 480,000.00
Total 1,223,100.00 47,800.00 Total
Unadjusted Bal. 1,175,300.00
Adjustments (e) 18,900.00
Adjusted Bal. 1,194,200.00

ALLOWANCE FOR DOUBTFUL ACCOUNTS

- Beginning
- Unadjusted Bal.
5,500.00 Adjustments (f)
5,500.00 Adjusted Bal.

NOTES RECEIVABLE
Beginning 80,000.00 80,000.00 Dec. 24
Unadjusted Bal. -
Adjustments -
Adjusted Bal. -
 PURCHASES
Jan. 31 300,000.00
Mar. 29 150,000.00
Nov. 24 450,000.00 900,000.00 Dec. 31
Total 900,000.00 900,000.00 Total
Unadjusted Bal. -
Adjustments -
Adjusted Bal. -

INVENTORY
Beginning 180,300.00 898,000.00 Cost of Goods Sold
Purchases 900,000.00
Total 1,080,300.00 898,000.00
Unadjusted Bal. 182,300.00 15,750.00 Adjustments (e)
Adjusted Bal. 166,550.00

PREPAID RENT EXPENSE

Beginning -
Unadjusted Bal. -
Adjustments (b) 75,000.00
Adjusted Bal. 75,000.00

LAND
Beginning 900,000.00
Unadjusted Bal. 900,000.00
Adjustments -
Adjusted Bal. 900,000.00

BUILDING
Beginning 800,000.00
Unadjusted Bal. 800,000.00
Adjustments -
Adjusted Bal. 800,000.00

ACCUMULATED DEPRECIATION - BLG.

14,000.00 Beginning
14,000.00 Unadjusted Bal.
14,000.00 Adjustments (c)
 28,000.00 Adjusted Bal.

OFFICE EQUIPMENT
Beginning 50,000.00
Unadjusted Bal. 50,000.00
Adjustments -
Adjusted Bal. 50,000.00

ACCUMULATED DEPRECIATION - O/E

1,600.00 Beginning
1,600.00 Unadjusted Bal.
3,200.00 Adjustments (d)
4,800.00 Adjusted Bal.

ACCOUNTS PAYABLE
Nov. 8 100,000.00 100,000.00 Beginning
300,000.00 Jan. 31
150,000.00 Mar. 29
450,000.00 Nov. 24
Total 100,000.00 1,000,000.00 Total
900,000.00 Unadjusted Bal.
- Adjustments
900,000.00 Adjusted Bal.

NOTES PAYABLE-ST
Dec. 19 100,000.00 300,000.00 Beginning
200,000.00 Unadjusted Bal.
- Adjustments
200,000.00 Adjusted Bal.

ACCRUED SALARIES EXPENSE

- Beginning
- Unadjusted Bal.
320,000.00 Adjustments (a)
320,000.00 Adjusted Bal.

NOTES PAYABLE-LT
500,000.00 Beginning
500,000.00 Unadjusted Bal.
 - Adjustments
500,000.00 Adjusted Bal.

BONDS PAYABLE
700,000.00 Beginning
700,000.00 Unadjusted Bal.
- Adjustments
700,000.00 Adjusted Bal.

PINAUBAYA, CAPITAL
710,200.00 Beginning
500,000.00 Jan. 2
1,210,200.00 Unadjusted Bal.
- Adjustments
Closing-Drawing 155,000.00 1,210,200.00 Adjusted Bal.
Closing-Inc. Sum. 354,950.00
Total 509,950.00 1,210,200.00 Total
700,250.00 FS Bal.

PINAUBAYA, DRAWING
Jul. 8 155,000.00
Unadjusted Bal. 155,000.00
Adjustments -
Adjusted Bal. 155,000.00 155,000.00 Closing
Postclosing Bal. -

SALES REVENUE
70,000.00 Feb. 8
157,600.00 Mar. 18
250,000.00 Apr. 15
120,000.00 Aug. 3
480,000.00 Dec. 18
1,077,600.00 Unadjusted Bal.
18,900.00 Adjustments (e)
Inc. Summary 1,096,500.00 1,096,500.00 Adjusted Bal.
-

COST OF SALES
Dec. 31 898,000.00
Unadjusted Bal. 898,000.00
Adjustments 15,750.00
Adjusted Bal. 913,750.00 913,750.00 Inc. Summary
-

SALARIES EXPENSE
Apr. 30 120,000.00
Unadjusted Bal. 120,000.00
Adjustments (a) 320,000.00
Adjusted Bal. 440,000.00 440,000.00 Inc. Summary
-

RENT EXPENSE
Feb. 14 150,000.00
Unadjusted Bal. 150,000.00 75,000.00 Adjustment (b)
Adjusted Bal. 75,000.00 75,000.00 Inc. Summary
-

DEPRECIATION EXPENSE - BLG.

Unadjusted Bal. -
Adjustments (c) 14,000.00
Adjusted Bal. 14,000.00 14,000.00 Inc. Summary
-

DEPRECIATION EXPENSE - O/E

Unadjusted Bal. -
Adjustments (d) 3,200.00
Adjusted Bal. 3,200.00 3,200.00 Inc. Summary
-

DOUBTFUL ACCOUNTS EXPENSE

Unadjusted Bal. -
Adjustments (f) 5,500.00
Adjusted Bal. 5,500.00 5,500.00 Inc. Summary
-

INCOME SUMMARY
Cost of Sales 913,750.00 1,096,500.00 Sales Revenue
Salaries Expense 440,000.00
Rent Expense 75,000.00
Dep. Exp. - Blg. 14,000.00
Dep. Exp. - O/E 3,200.00
Doubt. Acc. Exp. 5,500.00
Total 1,451,450.00 1,096,500.00 Total
354,950.00 354,950.00 Closing
Postclosing Bal. -
Legends: Unadjusted Bal. The balance before adjusting entries are made
Adjusted Bal. The balance after adjustments are made
The balance after clearing the nominal accounts
Postclosing Bal. The balance after closing nominal accounts
FS Bal. The balance shown in the Financial Statement

For computation purposes, I have included the post clearing balance and
postclosing balance to guide us in the preparation of Postclosing Trial Balance.
FS balance for Capital account title is also shown to indicate the effect of
closing entry to the Statement of Financial Position. However, it is never
necessary to update the ledger up to the end of closing entry preparation as it
is almost not seeable in the Financial Statements. Unadjusted and adjusted
balance is especially recommended as it is necessary in the preparation of the
Financial Statement.
 ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER

MASHIMA AR01
DATE PR DEBIT CREDIT BALANCE
2021
Feb. 08 70,000.00 70,000.00
Dec. 18 480,000.00 550,000.00

WATAYA AR02
DATE PR DEBIT CREDIT BALANCE
2021
Mar. 18 157,600.00 157,600.00
Dec. 31 18,900.00 176,500.00

AYASE AR03
DATE PR DEBIT CREDIT BALANCE
2021
Apr. 15 250,000.00 250,000.00

CHIHAYA AR04
DATE PR DEBIT CREDIT BALANCE
2021
Apr. 15 12,000.00 12,000.00
 ACCOUNTS PAYABLE SUBSIDIARY LEDGER

TAICHI MERCHANDISING AP01

DATE PR DEBIT CREDIT BALANCE
2021
Jan. 31 300,000.00 300,000.00
Mar. 29 150,000.00 450,000.00
Nov. 24 450,000.00 900,000.00
 PINAUBAYA CO.
Postclosing Trial Balance
December 31, 2021

PR DEBIT
Cash 110 152,800.00
Marketable Securities 120 20,000.00
Accounts Receivable 130 1,194,200.00
Allowance for Doubtful Accounts 132
Notes Receivable 140 -
Inventory 150 166,550.00
Purchases 152 -
Prepaid Rent Expense 160 75,000.00
Land 170 900,000.00
Building 180 800,000.00
Accumulated Depreciation - Blg. 185
Office Equipment 190 50,000.00
Accumulated Depreciation - O/E 195
Accounts Payable 210
Notes Payable-ST 220
Accrued Salaries Expense 230
Notes Payable-LT 240
Bonds Payable 250
Pinaubaya, Capital 310
Pinaubaya, Withdrawal 320 -
Sales Revenue 510
Cost of Sales 520 -
Salaries Expense 530 -
Rent Expense 540 -
Depreciation Expense - Blg. 550 -
Depreciation Expense - O/E 560 -
Doubtful Accounts Expense 570 -
Total 3,358,550.00
 ANSWER ME FIRST:
What kind of Trial Balance are you asking for?
CREDIT
Postclosing Trial Balance

5,500.00

28,000.00

4,800.00
900,000.00
200,000.00
320,000.00
500,000.00
700,000.00
700,250.00

3,358,550.00
king for?
ADJUSTING ENTRIES
DATE ACCOUNT TITLES AND EXPLANATION PR DEBIT
2021
a Salaries Expense 530 3 2 0 0 0 0 .
Accrued Salaries Expense 230
Adjust entries by recording unpaid salaries

b Prepaid Rent Epense 160 7 5 0 0 0 .

Rent Expense 540
Adjust unexpired portion of rent

c Depreciation Expense - Blg. 550 1 4 0 0 0 .

Accumulated Depreciation - Blg. 185
To record annual adjustment for Blg. Depreciation

d Depreciation Expense - O/E 560 3 2 0 0 .

Accumulated Depreciation - O/E 195
To record annual adjustment for O/E Depreciation

e Accounts Receivable 130 1 8 9 0 0 .

Sales Revenue 510
To record understatement of sales transaction (Invoice No. 31184)

Cost of Goods Sold 520 1 5 7 5 0 .

Inventory-End 150
To adjust the currently recorded inventory due to erroneous recording of sales transaction

f Doubtful Accounts Expense 570 5 5 0 0 .

Allowance for Doubtful Accounts 132
To record estimated uncollectible accounts
 Page 1
EBIT CREDIT (a) Accrued Salaries Computation:

00 No. of Mos
Employee Rate
3 2 0 0 0 0 . 00 Outstanding
a 10,000.00 8
b 10,000.00 8
00 c 10,000.00 8
7 5 0 0 0 . 00 d 10,000.00 8
TOTAL UNPAID/ACCRUED SALARIES

00
1 4 0 0 0 . 00 (b) Prepaid Rent Computation:

Recorded Rent Expense

00 Scope (January 1, 2021 to December 31, 2022)
3 2 0 0 . 00
Expired Portion (January 1, 2021 to December 31, 2021)
Unexpired Portion (January 1, 2022 to December 31, 2022)
00 TOTAL NO. OF YEARS FOR RENTAL PAYMENT
1 8 9 0 0 . 00
Expired Portion (Expense)

00 Rental Payment
1 5 7 5 0 . 00 Multiply:
g of sales transaction EXPIRED PORTION TO BE EXPENSED

00 Unexpired Portion (Asset)

5 5 0 0 . 00
Rental Payment
Multiply:
UNEXPIRED PORTION TO BE RECORDED AS ASSET

Recorded Rent Expense

Less: Actual Rent Expense for the Year
To be deducted to rent expense to
appropriately record an asset

(c) Computation of Annual Depreciation for Building:

Acquisition Cost of Building

Less: Accumulated Depreciation
Book Value of the Building - 01/01/21
Less: Salvage Value
Depreciable Amount for 2021
Divide: Estimated REMAINING Life
Depreciation for 2021

(d) Computation of Annual Depreciation for Office Equipment:

Acquisition Cost of Office Equipment

Less: Accumulated Depreciation
Book Value of the Office Equipment - 01/01/21
Less: Salvage Value
Depreciable Amount for 2021
Divide: Estimated REMAINING Life
Depreciation for 2021

(e) Correction of Errors Computation:

Entry Made: (See "General Journal Entries" March 18 Entry)

Accounts Receivable
Sales Revenue

Correct Entry:

Accounts Receivable
Sales Revenue

Error:

Correct Figure
Less: Incorrectly Recorded Figure
Misstatement to be Corrected (Understated)

So the correcting entry is to add A/R by debiting it and add Sales by c

shown in (e).
Since Sales recorded was adjusted, it's counterpart, Cost of Goods S
adjusted as well to reduce the cost of remaining inventory as it has b
year as shown in (e).
 Salaries Unpaid

80,000.00
80,000.00
80,000.00
80,000.00
320,000.00

150,000.00
2 years

December 31, 2021) 1 year 50%

to December 31, 2022) 1 year 50%
PAYMENT 2 years 100%

150,000.00
50%
75,000.00

150,000.00
50%
RDED AS ASSET 75,000.00

150,000.00
75,000.00
75,000.00

tion for Building:

800,000.00
14,000.00
786,000.00
 100,000.00
686,000.00
49
14,000.00

tion for Office Equipment:

50,000.00
1,600.00
48,400.00
2,000.00
46,400.00
14.5
3,200.00

Entries" March 18 Entry)

157,600.00
157,600.00

176,500.00
176,500.00

176,500.00
157,600.00
18,900.00

R by debiting it and add Sales by crediting it as

it's counterpart, Cost of Goods Sold must be

of remaining inventory as it has been sold within the
 PINAUBAYA CO.
Statement of Financial Position
as of December 31, 2021

ASSETS

CURRENT ASSETS
Cash
Marketable Securities
Accounts Receivable 1,194,200.00
Less: Allowance for Doubtful Accounts 5,500.00
Notes Receivable
Inventory
Prepaid Rent Expense
Total Current Assets

NONCURRENT ASSETS
Land
Building 800,000.00
Less: Accumulated Depreciation - Blg. 28,000.00
Office Equipment 50,000.00
Less: Accumulated Depreciation - O/E 4,800.00
Total Noncurrent Assets
TOTAL ASSETS

LIABILITIES AND OWNER'S EQUITY

CURRENT LIABILITIES
Accounts Payable
Notes Payable-ST
Accrued Salaries Expense
Total Current Liabilities

NONCURRENT LIABILITIES
Notes Payable-LT
Bonds Payable
Total Noncurrent Liabilities
TOTAL LIABILITIES
 OWNER'S EQUITY
Pinaubaya, Capital
TOTAL OWNER'S EQUITY
TOTAL LIABILITIES AND EQUITY
 PINAUBAYA CO.
Statement of Financial Performance
for the year ended December 31, 2021

Sales Revenue
Less: Cost of Goods Sold
Beginning Inventory 180,300.00
152,800.00 Net Purchases 900,000.00
20,000.00 Cost of Goods Available for Sale 1,080,300.00
Less: Ending Inventory 166,550.00
1,188,700.00 Gross Profit
-
166,550.00 Expenses
75,000.00 Salaries Expense 440,000.00
1,603,050.00 Rent Expense 75,000.00
Depreciation Expense - Blg. 14,000.00
Depreciation Expense - O/E 3,200.00
900,000.00 Allowance for Doubtful Accounts 5,500.00
NET LOSS
772,000.00

45,200.00
1,717,200.00
3,320,250.00

900,000.00
200,000.00
320,000.00
1,420,000.00

500,000.00
700,000.00
1,200,000.00
2,620,000.00
 700,250.00
700,250.00
3,320,250.00
 PINAUBAYA CO.
mance Statement of Changes in Owner's Equity
2021 for the year ended December 31, 2021

1,096,500.00 Beginning Capital Balance

Add: Additional Investment 500,000.00

Less: Withdrawals 155,000.00

913,750.00 Net Loss 354,950.00
182,750.00 ENDING CAPITAL BALANCE

537,700.00
- 354,950.00
 PINAUBAYA CO.
er's Equity Statement of Cash Flows
31, 2021 for the year ended December 31, 2021

710,200.00 Cash flows from Operating Activities

Change in Net Assets or Owner's Equity
500,000.00 Adjustments to Reconcile to Cash Basis:
Add: Depreciation Expense - Blg. 14,000.00
Depreciation Expense - O/E 3,200.00
- 509,950.00 Doubtful Accounts Expense 5,500.00
700,250.00 Increase in Accounts Receivable
Decrease in Notes Receivable
Decrease in Inventory
Increase in Prepaid Rent Expense
Increase in Accounts Payable
Decrease in Notes Payable-ST
Increase in Accrued Salaries Expense
Net Cash Flows from Operating Activities

Cash flows from Investing Activities

Net Cash Flows from Investing Activities

Cash flows from Financing Activities

Net Cash Flows from Financing Activities
NET CASH
Beginning Cash Balance
ENDING CASH BALANCE
O.
Flows
ber 31, 2021

- 9,950.00

22,700.00
- 1,048,700.00
80,000.00
13,750.00
- 75,000.00
800,000.00
- 100,000.00
320,000.00
2,800.00

-
-

-
-
2,800.00
150,000.00
152,800.00
CLOSING ENTRIES
DATE ACCOUNT TITLES AND EXPLANATION PR DEBIT
2021
December 31 Sales Revenue 510 1 0 9 6 5 0 0 .
Income Summary 330 3 5 4 9 5 0 .
Cost of Goods Sold 520
Salaries Expense 530
Rent Expense 540
Depreciation Expense - Blg. 550
Depreciation Expense - O/E 560
Doubtful Accounts Expense 570
To clear income and expense to Income Summary

Pinaubaya, Capital 310 5 0 9 9 5 0 .

Pinaubaya, Withdrawal 320
Income Summary 330
To close temporary accounts to capital balance
 Page 1
EBIT CREDIT

00
00
9 1 3 7 5 0 . 00
4 4 0 0 0 0 . 00
7 5 0 0 0 . 00
1 4 0 0 0 . 00
3 2 0 0 . 00
5 5 0 0 . 00

00
1 5 5 0 0 0 . 00
3 5 4 9 5 0 . 00
REVERSING ENTRIES
DATE ACCOUNT TITLES AND EXPLANATION PR DEBIT
2022
January 1 Accrued Salaries Expense 230 3 2 0 0 0 0 .
Salaries Expense 530
Reverse accrued expense

Rent Expense 540 7 5 0 0 0 .

Prepaid Rent Expense 160
Reversal of prepayment-expense method
 Page 1
EBIT CREDIT

00
3 2 0 0 0 0 . 00

00
7 5 0 0 0 . 00
 2021 2020
Cash 152,800.00 150,000.00
Marketable Securities 20,000.00 20,000.00
Accounts Receivable 1,194,200.00 145,500.00
Less: Allowance for Doubtful Accounts 5,500.00 -
Accounts Receivable, net 1,188,700.00 145,500.00
Notes Receivable - 80,000.00
Inventory 166,550.00 180,300.00
Prepaid Rent Expense 75,000.00 -
Total Current Assets 1,603,050.00 575,800.00

Land 900,000.00 900,000.00

Building 800,000.00 800,000.00
Less: Accumulated Depreciation - Blg. 28,000.00 14,000.00
Building, net 772,000.00 786,000.00
Office Equipment 50,000.00 50,000.00
Less: Accumulated Depreciation - O/E 4,800.00 1,600.00
Office Equipment, net 45,200.00 48,400.00
Total Noncurrent Assets 1,717,200.00 1,734,400.00
TOTAL ASSETS 3,320,250.00 2,310,200.00

Accounts Payable 900,000.00 100,000.00

Notes Payable-ST 200,000.00 300,000.00
Accrued Salaries Expense 320,000.00 -
Total Current Liabilities 1,420,000.00 400,000.00

Notes Payable-LT 500,000.00 500,000.00

Bonds Payable 700,000.00 700,000.00
Total Noncurrent Liabilities 1,200,000.00 1,200,000.00
TOTAL LIABILITIES 2,620,000.00 1,600,000.00

Pinaubaya, Capital 700,250.00 710,200.00

Total Owner's Equity 700,250.00 710,200.00
TOTAL LIABILITIES AND OWNER'S EQUITY 3,320,250.00 2,310,200.00

Sales Revenue 1,096,500.00 500,500.00

Cost of Sales
Beginning Inventory 180,300.00 70,000.00
Purchases 900,000.00 300,000.00
 Cost of Goods Available for Sale 1,080,300.00 370,000.00
Less: Ending Inventory 166,550.00 180,300.00
Cost of Sales 913,750.00 189,700.00
GROSS PROFIT 182,750.00 310,800.00

Salaries Expense 440,000.00 120,000.00

Rent Expense 75,000.00 1,500.00
Depreciation Expense - Blg. 14,000.00 14,000.00
Depreciation Expense - O/E 3,200.00 1,600.00
Doubtful Accounts Expense 5,500.00 -
Total Expenses 537,700.00 137,100.00
NET LOSS/INCOME - 354,950.00 173,700.00
HORIZONTAL ANALYSIS VERTICAL ANALYSIS
(base 2020) 2021 2020 CURRENT RATIO

1.87% 4.60% 6.49% 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜=(𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠)/(𝐶𝑢𝑟𝑟

0.00% 0.60% 0.87%
720.76%
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜=1,603,050/1,420,00
100.00%
716.98% 35.80% 6.30%
-100.00% 0.00% 3.46% 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜=𝟏.𝟐𝟗
-7.63% 5.02% 7.80%
100.00% 2.26% 0.00% ACID-TEST RATIO
178.40% 48.28% 24.92%
𝑄𝑢𝑖𝑐𝑘 𝑅𝑎𝑡𝑖𝑜=(𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠)/(𝐶𝑢𝑟𝑟𝑒𝑛𝑡
0.00% 27.11% 38.96%
0.00% 𝑄𝑢𝑖𝑐𝑘 𝑅𝑎𝑡𝑖𝑜=1,361,500/1,420,000
100.00%
-1.78% 23.25% 34.02%
𝑄𝑢𝑖𝑐𝑘 𝑅𝑎𝑡𝑖𝑜=𝟎.𝟗𝟔
0.00%
200.00%
-6.61% 1.36% 2.10% DEBT RATIO
-0.99% 51.72% 75.08%
𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜=(𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠)/(𝑇𝑜𝑡𝑎𝑙
43.72% 100.00% 100.00%

800.00% 27.11% 4.33%

𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜=2,620,000/3,320,250
-33.33% 6.02% 12.99%
100.00% 9.64% 0.00%
255.00% 42.77% 17.31%
𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜=𝟎.𝟕𝟗

0.00% 15.06% 21.64% EQUITY RATIO

0.00% 21.08% 30.30%
0.00% 36.14% 51.94% 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜=(𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦)/(𝑇𝑜𝑡𝑎𝑙 𝐴𝑠
63.75% 78.91% 69.26%

-1.40% 21.09% 30.74% 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜=700,250/3,320,250

-1.40% 21.09% 30.74%
43.72% 100.00% 100.00%
𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜=𝟎.𝟐𝟏

RECEIVABLE TURNO
119.08% 100.00% 100.00%
𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=(𝑁𝑒𝑡 𝐶𝑟𝑒
157.57%
200.00%
𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=1,096,50
191.97% 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=1,096,50
-7.63%
381.68% 83.33% 37.90%
-41.20% 16.67% 62.10% 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=𝟏.𝟔𝟒 𝒕𝒊𝒎

266.67% 40.13% 23.98% AVERAGE COLLECTION

4900.00% 6.84% 0.30%
0.00% 1.28% 2.80% 𝐴𝐶𝑃=(𝑁𝑜.𝑜𝑓 𝐷𝑎𝑦𝑠 𝑝𝑒𝑟 𝑌𝑒𝑎𝑟)/(𝑅
100.00% 0.29% 0.32%
100.00% 0.50% 0.00%
292.20% 49.04% 27.39% 𝐴𝐶𝑃=360/1.64
-304.35% -32.37% 34.71%
𝐴𝐶𝑃=𝟐𝟐𝟎 𝒅𝒂𝒚𝒔
 CURRENT RATIO PAYABLE TURNOVER

(𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠)/(𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠) 𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=(𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑃𝑎𝑦𝑎𝑏𝑙𝑒)

𝑡𝑖𝑜=1,603,050/1,420,000 𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=900,000/500,000

𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜=𝟏.𝟐𝟗 𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=𝟏.𝟖 𝒕𝒊𝒎𝒆𝒔

ACID-TEST RATIO AVERAGE PAYMENT PERIOD

𝑄𝑢𝑖𝑐𝑘 𝐴𝑠𝑠𝑒𝑡𝑠)/(𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠) 𝐴𝑃𝑃=(𝑁𝑜.𝑜𝑓 𝐷𝑎𝑦𝑠 𝑝𝑒𝑟 𝑌𝑒𝑎𝑟)/( 𝑃𝑎𝑦𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟)

𝑜=1,361,500/1,420,000 𝐴𝑃𝑃=360/( 1.8)

𝑅𝑎𝑡𝑖𝑜=𝟎.𝟗𝟔 𝐴𝑃𝑃=𝟐𝟎𝟎 𝒅𝒂𝒚𝒔

DEBT RATIO INVENTORY TURNOVER

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠)/(𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠) 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=(𝐶𝑜𝑠𝑡 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦)

=2,620,000/3,320,250 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=913,750/173,425

𝑅𝑎𝑡𝑖𝑜=𝟎.𝟕𝟗 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=𝟓.𝟐𝟕 𝒕𝒊𝒎𝒆𝒔

EQUITY RATIO AVERAGE CONVERSION PERIOD

𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦)/(𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠) 𝐴𝐶𝑜𝑃=(𝑁𝑜.𝑜𝑓 𝐷𝑎𝑦𝑠 𝑝𝑒𝑟 𝑌𝑒𝑎𝑟)/( 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟)

𝑖𝑜=700,250/3,320,250 𝐴𝐶𝑜𝑃=360/( 5.27)

𝑦 𝑅𝑎𝑡𝑖𝑜=𝟎.𝟐𝟏 𝐴𝐶𝑜𝑃=𝟔𝟗 𝒅𝒂𝒚𝒔

RECEIVABLE TURNOVER CASH CONVERSION CYCLE

𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=(𝑁𝑒𝑡 𝐶𝑟𝑒𝑑𝑖𝑡 𝑆𝑎𝑙𝑒𝑠)/(𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒) 𝐶𝐶𝐶=𝐴𝐶𝑜𝑃+𝐴𝐶𝑃−𝐴𝑃𝑃

𝐶𝐶𝐶=69 𝑑𝑎𝑦𝑠+220 𝑑𝑎𝑦𝑠−200 𝑑𝑎𝑦𝑠

𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=1,096,500/667,100
 𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=1,096,500/667,100
𝐶𝐶𝐶=𝟐𝟔 𝒅𝒂𝒚𝒔

𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟=𝟏.𝟔𝟒 𝒕𝒊𝒎𝒆𝒔

AVERAGE COLLECTION PERIOD GROSS PROFIT MARGIN

𝑁𝑜.𝑜𝑓 𝐷𝑎𝑦𝑠 𝑝𝑒𝑟 𝑌𝑒𝑎𝑟)/(𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟) 𝐺𝑃𝑀=(𝐺𝑟𝑜𝑠𝑠 𝑃𝑟𝑜𝑓𝑖𝑡)/𝑆𝑎𝑙𝑒𝑠

0/1.64 𝐺𝑃𝑀=182,750/1,096,500

𝟐𝟎 𝒅𝒂𝒚𝒔 𝐺𝑃𝑀=𝟏𝟔.𝟔𝟕%

RETURN ON SALES

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑆𝑎𝑙𝑒𝑠=(𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒)/𝑆𝑎𝑙𝑒𝑠

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑆𝑎𝑙𝑒𝑠=(−354,950)/1,096,500

𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝑆𝑎𝑙𝑒𝑠=−𝟑𝟐.𝟑𝟕%

NET WORKING CAPITAL

𝑁𝑊𝐶=𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 −𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑁𝑊𝐶=1,603,050−1,420,000

𝑁𝑊𝐶=𝟏𝟖𝟑,𝟎𝟓𝟎