LOPE LARANJO BATO & CO.

Certified Public Accountants

(A Member Firm of The Leading Edge Alliance Global)
2/F Bato Building, Villa Vicente, Zone 1, Kauswagan
Cagayan de Oro City, 9000 Philippines
Email: [email protected] and [email protected]
Mobile Nos.: (063)918-8887070 & (063)9985715654

Financial Statements of
A&M Commercial
and General
Merchandise
(Single Proprietorship)
December 31, 2023
(With Comparative Figures for 2022)

And

Report of Independent Auditors

 LOPE LARANJO BATO & CO.
Certified Public Accountants
(A Member Firm of The Leading Edge Alliance Global)
2/F Bato Building, Villa Vicente, Zone 1, Kauswagan
Cagayan de Oro City, 9000 Philippines
Email: [email protected] and [email protected]
Mobile Nos.: (063)918-8887070 & (063)9985715654
Firm’s Accreditations:
BOA Accreditation No. 6358
Valid until September 13, 2024
BIR Accreditation No. 16-006925-000-2023
Valid until September 29, 2026
SEC Group C Accreditation No. 6358-SEC
Valid until December 31, 2025
BSP Group B Accreditation No. 6358-BSP

REPORT OF INDEPENDENT AUDITORS Valid until December 31, 2025

NEA Accreditation No. 2023-11-00097
Valid until December 10, 2026
Branches: CDA Accreditation No. 120-AF
Valid until April 7, 2024

Metro Manila Office

Unit 827, South Star Plaza
Osmeña Highway The Proprietor Brgy 2, San Francisco
Bangkal, Makati City
Cell (063)9177024175 A&M Commercial and Agusan del Sur
[email protected]
General Merchandise

Cebu Branch Report on the Audit of the Financial Statements

c/o Reyes & Bato Consulting
3F Reyes Building
Del Rosario Street, Guizo,
Mandaue City, Cebu Province Opinion
Tel No.: (032) 212-3140
We have audited the financial statements of A&M Commercial and General Merchandise (a single
proprietorship), which comprise the statement of financial position as at December 31, 2023 (with
Davao Branch comparative figures for 2022), and the related statement of profit or loss, statement of changes in
Unit 211, 2F Pink Walters Bldg.,
Quimpo Blvd., Ecoland, Bucana equity, and statement of cash flows for the year then ended, and notes to the financial statement,
Talomo District, Davao City, 8000
Cell: (+63) 9262255317
including a summary of significant accounting policies.

Butuan Branch In our opinion, the accompanying financial statements present fairly, in all material respects, the
2F MCAGA Building
Purok 4 J.P Rosales Avenue financial position of A&M Commercial and General Merchandises (a single proprietorship) as at
Limaha Pob. (Brgy. 14)
Butuan City 8600
December 31, 2023 (with comparative figures for 2022), and its financial performance and its cash flows
Cell (063) 09171131520 for the year then ended in accordance with Philippine Financial Reporting Standards for Small Entities
(PFRS for SEs).
Ozamiz Branch
G/F Medina Building
Gallardo Street
Other Matters
Ozamiz City
Tel. No.: (088)564-3481
The financial of the Company for the year ended December 31, 2022 have been audited by another
auditor whose opinion on those statement, dated March 12, 2023, was unqualified. The prior year’s
balances were only presented for comparative purposes.
Malaybalay Branch
2F Jamstar Building
Judge P. Carillo Street
Malaybalay City, Bukidnon
Basis for Opinion
Tel. No.: (088)314-0694 We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in Auditors’ Responsibilities for the Audit of
Ipil Branch the Financial Statements section of our report. We are independent of the Proprietorship in accordance
2nd Floor Avery Arcade Sanito
Ipil Zamboanga Sibugay
with the Code of Ethics for Professional Accountants in the Philippines (Code of Ethics), together with
7001 Philippines the ethical requirements that are relevant to our audit of the financial statements, and we have fulfilled
Tel.No.: 0629574281
Cell: (+63) 09296089081 our other ethical responsibilities in accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with Philippine Financial Reporting Standards for Small Entities (PFRS for SEs), and for
such internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Proprietorship’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management either intends to liquidate the
Proprietorship or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Proprietorship’s financial reporting
process.
 -2-
LLB & Co.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with PSAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Proprietorship’s internal control;

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Proprietorship’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditors’ report to the related disclosures in the financial statements or,
if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditors’ report. However, future events or
conditions may cause the Proprietorship to cease to continue as a going concern; and

• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
 -3-
LLB & Co.

Report on the Supplementary Information Required by the Bureau of Internal Revenue

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken
as a whole. The supplementary information under Revenue Regulations No. 15-2010 and Revenue
Regulations No. 34-2020 in Note 13 to the financial statements is presented for purposes of filing with
the Bureau of Internal Revenue and is not a required part of the basic financial statements. Such
supplementary information is the responsibility of A&M Commercial and General Merchandise and has
been subjected to the auditing procedures applied in our audit of the basic financial statements. In our
opinion, the supplementary information is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.

In compliance with Revenue Regulation V-20, we are stating that we are not related by consanguinity or
affinity to the Proprietor.

LOPE LARANJO BATO & Co.

By: JAN GARIV M. PACUMBA

Partner
CPA Cert. No. 130983
TIN 413-387-329
BIR Accreditation No. RR16-006925-002-2021, valid until October 20, 2024
SEC Group C Accreditation No. 130983-SEC, valid until October 25, 2025
BSP Accreditation No. 130983-BSP, valid until September 24, 2025
PTR No. 5244359A, January 10, 2024, Ozamis City

April 13, 2024

Ozamis City, Philippines
STATEMENT OF FINANCIAL POSITION
A&M Commercial and General Merchandise
(A Single Proprietorship)
(With Comparative Figures for 2022)

December 31 2023 2022

ASSETS

Current Assets
Cash (Note 3) P
= 10,614,636 P
= 8,887,531
Trade receivables (Note 4) 3,827,485 3,475,629
Merchandise inventories (Note 5) 1,539,164 1,264,892
Total Current Assets 15,981,285 13,628,052

Non-Current Asset
Property and equipment (Note 6) 14,940,000 15,040,000

TOTAL ASSETS P
= 30,921,285 P
= 28,668,052

LIABILITIES AND OWNER’S EQUITY

Current Liabilities
Trade and other payables (Note 7) P
= 9,179,240 P
= 8,566,981
Borrowings (Note 9) 1,800,000 2,000,000
Income tax payable (Note 8) 210,065 201,428
Total Current Liabilities 11,189,305 10,768,409

Owner’s Equity 19,731,980 17,899,643

TOTAL LIABILITIES AND OWNER’S EQUITY P

= 30,921,285 P
= 28,668,052
See Notes to Financial Statements.
STATEMENT OF PROFIT OR LOSS
A&M Commercial and General Merchandise
(A Single Proprietorship)
(With Comparative Figures for 2022)

Year Ended December 31 2023 2022

REVENUE P
= 60,753,405 P
= 60,607,329

DIRECT COSTS (Note 10) 43,237,841 43,015,198

GROSS PROFIT 17,515,564 17,592,131

OPERATING EXPENSES
Salaries and wages 4,203,096 4,158,200
Repairs and maintenance 2,526,859 3,285,763
Communications 1,726,354 1,653,428
Fuel, oil, and lubricants 1,446,358 1,729,268
Taxes and licenses (Note 13) 487,238 456,376
Donations 475,000 450,000
Office supplies 452,143 428,975
Travel and transportation 435,648 426,753
Insurance 318,247 310,752
SSS, PHIC and Pag-ibig contributions 178,353 172,648
Depreciation 100,000 100,000
Professional fee 15,000 15,000
Miscellaneous 1,855,351 1,623,499
14,219,647 14,810,662

PROFIT FROM OPERATIONS 3,295,917 2,781,469

OTHER CHARGES
Interest expense (Note 9) (246,150) (273,500)

PROFIT BEFORE INCOME TAX 3,049,767 2,507,969

INCOME TAX EXPENSE (Note 8) 717,430 652,550

PROFIT FOR THE YEAR P

= 2,332,337 P
= 1,855,419
See Notes to Financial Statements.
STATEMENT OF CHANGES IN EQUITY
A&M Commercial and General Merchandise
(A Single Proprietorship)
(With Comparative Figures for 2022)

December 31 2023 2022

CAPITAL
Balance at beginning of year P
= 17,899,643 P
= 15,344,224
Profit for the year 2,332,337 1,855,419
Additional contribution - 1,000,000
Drawings (500,000) (300,000)

BALANCE AT END OF YEAR P

= 19,731,980 P
= 17,899,643
See Notes to Financial Statements.
STATEMENT OF CASH FLOWS
A&M Commercial and General Merchandise
(A Single Proprietorship)
(With Comparative Figures for 2022)

Year Ended December 31 2023 2022

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the year P
= 2,332,337 P
= 1,855,419
Adjustment for depreciation (Note 6) 100,000 100,000
Changes in operating resources and liabilities:
Decrease in trade receivables (Note 4) (351,856) (1,112,782)
Decrease in merchandise inventories (Note 5) (274,272) (192,407)
Increase in trade and other payables (Note 7) 612,259 665,381
Total 2,418,468 1,315,611
Taxes paid (Note 8) 8,637 16,080
Net Cash Provided by Operating Activities 2,427,105 1,331,691

CASH FLOW FROM INVESTING ACTIVITY

Additions to property and equipment - (2,400,000)

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings (200,000) -
Additional contributions - 1,000,000
Drawings (500,000) (300,000)
Net Cash (Used in) Provided by Financing Activities (700,000) 700,000

NET INCREASE (DECREASE) IN CASH 1,727,105 (368,309)

OPENING CASH 8,887,531 9,255,840

CLOSING CASH P
= 10,614,636 P
= 8,887,531
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
A&M Commercial and General Merchandise
(A Single Proprietorship)
(With a Comparative Figures for 2022))

Note 1
General Information

Organization
A&M Commercial and General Merchandise is owned by Marylou B. Franco, a single proprietorship
business primarily engaged in retail of books, office and school supplies, newspapers, and magazines.
He was registered in the Bureau of Internal Revenue (BIR) in February 1, 1996 with Tax Identification
Number (TIN) 155-456-602-000.

Business Address
Its principal place of business is located at Brgy 2, San Francisco, Agusan del Sur.

Approval of Financial Statements

The financial statements of the Proprietorship for the year ended December 31, 2023 was authorized for
issue by the Proprietor on April 13, 2024.

Note 2
Summary of Significant Accounting Policies

Basis of Preparation
This set of financial statements was prepared by the Proprietorship in accordance with Philippine Financial
Reporting Standard for Small Entities (the “Framework”) as approved by the Financial Reporting Standards
Council, Board of Accountancy, and Securities and Exchange Commission (SEC). They have been prepared
on a historical cost basis except for investment property that has been measured at fair value.

Financial Instruments
A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability
or equity instrument of another entity. A financial instrument is recognized when the entity becomes a party to
its contractual provisions. The Proprietorship classifies its financial instruments into the following categories: (a)
basic financial instruments; and (b) complex financial instruments.

The Proprietorship’s basic financial instruments consist of cash and cash equivalents, trade and other
receivables, borrowings, trade and other payables. The Proprietorship does not have complex financial
instruments.

Basic Financial Instruments

Initial Measurement
On initial recognition, a debt financial instrument is measured at transaction price (including transaction cost),
unless the arrangement is in effect a financing transaction. In this case, it is measured at present value of the
future payment discounted using a market rate of interest for a similar debt instrument.

Subsequent Measurement
The Proprietorship’s debt financial instruments are subsequently measured at amortized cost using the
effective interest method.
 -2-

Derecognition of Financial Assets

An entity only derecognizes a financial asset when the contractual rights to the cash flows from the assets have
expired or are settled, or the entity has transferred to another party substantially all the risks and rewards of
ownership relating to the financial asset.
Derecognition of Financial Liabilities
Financial liabilities are derecognized only when these are extinguished – that is, when the obligation is
discharged, cancelled or has expired.

Cash
Cash substantially comprise cash on hand and in banks which are subject to insignificant risk of change in
value. These are carried in the books at face value. The Proprietorship has no cash equivalents at the end of
the year.

Trade Receivables
Trade receivables are recognized initially at the transaction price. They are subsequently measured at
amortized cost using the effective interest method. A provision for impairment of trade receivables is
established when there is objective evidence that the Proprietorship will not be able to collect all amounts due
according to the original terms of the receivables.

Merchandise Inventories
Merchandise inventories are stated at the lower of cost or market value (i.e., the probable selling price to willing
buyers as at the reporting date). Cost is determined using the first-in, first-out (FIFO) method.

Property and Equipment

Property and equipment are stated at historical cost less accumulated depreciation and any accumulated
impairment losses.

Land is not depreciated. Depreciation on other classes of property and equipment is charged so as to allocate
cost of assets less their residual values over their estimated useful lives, using the straight-line method. The
estimated useful lives of the Proprietorship’s depreciable assets are as follows:

Building 20 years
Machineries and equipments 10 years
Service vehicles 10 years
Other depreciable assets 5 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if
appropriate, if there is an indication of a significant change since the last reporting period.

Trade and Other Payables

Trade and other payables are recognized initially at the transaction price and subsequently measured at
amortized cost using the effective interest method.

Borrowings and Borrowing Costs

Borrowings are recognized initially at the transaction price (that is, the present value of cash payable to the
bank, including transaction costs). Borrowings are subsequently stated at amortized cost. Interest expense is
recognized on the basis of the effective interest method and is included in finance costs.

Borrowings are classified as current liabilities unless the Proprietorship has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.

All borrowing costs are expensed as incurred.

 -3-

Revenue and Cost Recognition

Revenue is recognized to the extent that it is probable that economic benefits will flow to the Proprietor
and the revenue can be reasonably measured. The following specific criteria are also met in recognizing
revenue:

o Service Income – Revenue is recognized when the service is rendered by the Proprietorship
regardless of when payment is received.

o Sale of goods - revenue is recognized when the risks and reward of ownership of the goods
have passed to the buyer

o Interest income from Proprietorship deposits and investments is recognized on the accrual
method.

o Revenue from other sources is recognized on the accrual method.

Cost and expenses are recognized in the income statement upon utilization of the service or at the date,
they are incurred.

Rental Income
Rental receipts from investment property that is leased to a third party is recognized as income in the
profit or loss in the period in which they are earned. Rental income is included in “other income” account
in the statement of profit or loss.

Employees’ Benefits
The Proprietorship’s employees are provided with the following benefits:

º Retirement Benefits Obligation

Retirement benefits are provided to employees through a defined benefit plan. A defined benefit plan
is a retirement plan that defines an amount of retirement benefit an employee will receive on
retirement, usually dependent on one or more factors such as age, years of service and salary. The
legal obligation for the benefits of the retirement plan remains with the Proprietorship, even if plan
assets for funding the defined benefit plan have been acquired. Plan assets may include assets
specifically designated to a long-term benefit fund, as well as qualifying insurance policies. The
Proprietorship’s defined benefit retirement plan covers all regular employees and is only partially
funded.

º Termination Benefits
Termination benefits are payable when employment is terminated by the Proprietorship before the
normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for
these benefits. The Proprietorship recognizes termination benefits when it is demonstrably committed
to either: (a) terminating the employment of current employees according to a detailed formal plan
without possibility of withdrawal; or (b) providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than 12 months after the reporting date
are discounted to present value.

º Compensated Absences
Compensated absences are recognized for the number of paid leave days (including holiday
entitlement) remaining at the balance sheet date. The amounts recognized are included in Trade and
Other Payables account in the statement of financial position at the undiscounted amount that the
Proprietorship expects to pay as a result of the unused entitlement.

Expense Recognition
Expenses are recognized in the statement of profit or loss upon utilization of the assets or services or at
the date these are incurred. All costs are reported in the statement of profit and loss on accrual basis.

Income Taxes
Current tax. Current income tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and laws used to
compute the amount are those that are enacted or substantively enacted at the balance sheet date.
 -4-

Events after the Reporting Period

Post year-end events that provide additional information about the Proprietorship’s position at the balance
sheet date (adjusting events), are reflected in the financial statements. Post year-end events that are not
adjusting events are disclosed in the notes to financial statements when material.

Note 3
Cash

This account consists of the following:

December 31 2023 2022

Cash on hand P
= 441,683 P
= 369,817
Cash in bank 10,172,953 8,517,714
P
= 10,614,636 P
= 8,887,531

Note 4
Trade Receivables

Accounts receivable – trade are collectibles from various customers amounting to P = 3,827,485 and
P
= 3,475,629 in 2023 and 2022, respectively, which do not bear interest, collectible within a year and
is not impaired.

Note 5
Merchandise Inventories

This consist of unsold goods at the end of the year amounting to P

= 1,539,164 and P
= 1,264,892 in 2023 and
2022, respectively.

Note 6
Property and Equipment

The property and equipment, which are stated at cost, consists of the following:

December 31 2023 2022

Residential land P
= 1,100,000 P
= 1,100,000
Agricultural land 550,000 550,000
Building 7,600,000 7,600,000
Machineries and equipment 2,000,000 2,000,000
Service vehicle 4,760,000 4,760,000
Other depreciable asset 400,000 400,000
Total 16,410,000 16,410,000
Less: accumulated depreciation (1,470,000) (1,370,000)
P
= 14,940,000 P
= 15,040,000
 -5-

The reconciliation of the movements of the accounts follows:

December 31, 2023 Beg. Balance Additions Retirement End Balance

Cost
Residential land P
= 1,100,000 - - P
= 1,100,000
Agricultural land 550,000 - - 550,000
Building 7,600,000 - - 7,600,000
Machineries and equipment 2,000,000 - - 2,000,000
Service vehicle 4,760,000 - - 4,760,000
Other depreciable asset 400,000 - - 400,000
P
= 16,410,000 - - P
= 16,410,000
Accumulated Depreciation -
Building 705,420 51,490 - 756,910
Machineries and equipment 185,637 13,550 - 199,187
Service vehicle 441,816 32,250 - 474,066
Other depreciable asset 37,127 2,710 - 39,837
1,370,000 100,000 - 1,470,000
Net Book Value P
= 15,040,000 (P
= 100,000) - P
= 14,940,000

December 31, 2022 Beg. Balance Additions Retirement End Balance

Cost
Residential land P
= 1,100,000 - - P
= 1,100,000
Agricultural land 550,000 - - 550,000
Building 7,600,000 - 7,600,000
Machineries and equipment 2,000,000 - - 2,000,000
Service vehicle 4,760,000 - - 4,760,000
Other depreciable asset 400,000 - - 400,000
P
= 16,410,000 - - P
= 16,410,000
Accumulated Depreciation -
Building P
= 653,930 P
= 51,490 - P
= 705,420
Machineries and equipment 172,087 13,550 - 185,637
Service vehicle 409,566 32,250 - 441,816
Other depreciable asset 34,417 2,710 - 37,127
1,270,000 100,000 - 1,370,000
Net Book Value P
= 15,140,000 (P
= 100,000) - P
= 15,040,000

Note 7
Trade and Other Payables

This account consists of the following:

December 31 2023 2022

Accounts payable - trade P
= 7,346,582 P
= 6,918,735
Other payables 1,832,658 1,648,246
P
= 9,179,240 P
= 8,566,981

Accounts payable - trade are liabilities arising from purchases of inventory from different suppliers, which
are unpaid at the end of the period.

Other payables account consists of payables pertainingto other accrued and operating expenses.
 -6-

Note 8
Income Tax Expense

The current tax expense was derived by the following computations:

Years Ended December 31 2023 2022

Profit subject to tax P
= 3,049,767 P
= 2,507,969
Income tax expense (based on graduated tax rate) 717,430 652,550
Tax payments for the first three quarters (195,898) (134,175)
Creditable tax withheld (BIR Form 2307) (311,467) (316,947)
Income tax payable P
= 210,065 P
= 201,428

Note 9
Borrowings

This account consists of loans payable amounting to P = 1,800,000 and 2,000,000 in 2023 and 2022,
respectively. The Proprietorship paid a total amount of P
= 246,150 and P
= 273,500 of interest expense in
2023 and 2022, respectively.

Note 10
Direct Costs

This account consists of:

Year Ended December 31 2023 2022
Merchandise inventories, beginning P
= 1,264,892 P
= 1,072,485
Add: Purchases 43,512,113 43,207,605
Total 44,777,005 44,280,090
Less: Merchandise inventories, ending (Note 5) 1,539,164 1,264,892
P
= 43,237,841 P
= 43,015,198

Note 11
Commitments and Contingencies

In the normal course of its operations, the Proprietorship makes various commitments and incurs certain
contingent liabilities which are not reflected in the accompanying financial statements. Management
anticipates no material losses, if any, that may arise from these commitments and contingencies.

Note 12
Events After the Reporting Period

As of reporting date, there were no other events after balance sheet date that would require disclosures or
adjustments on the financial statements of the Proprietorship.
 -7-

Note 13
Supplementary Information Required by the Bureau of Internal Revenue

Revenue Regulations (RR) No. 15-2010

On December 28, 2010, RR No. 15-2010 became effective and amended certain provisions of
RR No. 21-2002 prescribing the manner of compliance with any documentary and/or procedural
requirements in connection with the preparation and submission of financial statement and income tax
returns. Section 2 of RR No. 21-2002 was further amended to include in the Notes to Financial Statement
information on taxes, duties and license fees paid or accrued during the year in addition to what is
mandated by PFRS for SEs.

Below is the additional information required by RR No. 15-2010. This information is presented for
purposes of filing with the Bureau of Internal Revenue (BIR) and is not a required part of the basic
financial statement.

a. Value Added Tax (VAT)

VAT payable declared and paid for the years ended December 31, 2023 and 2022 consists of
the following:

Years Ended December 31 2023 2022

Balance at beginning of the year P
= 164,977 -
Output tax 7,290,409 P
= 7,272,879
Total 7,455,386 7,279,879
Input tax (5,221,454) (5,184,913)
VAT withheld on sales to government (1,316,639) (1,490,424)
Payments (735,867) (432,565)
Balance at the end of the year P
= 181,426 P
= 164,977

b. Taxes and licenses

All other local and national taxes paid for the year ended December 31, 2023 and 2022 consist
of the following:

Years Ended December 31 2023 2022

Business permit and other fees P
= 486,738 P
= 455,876
BIR annual registration 500 500
P
= 487,238 P
= 456,376

c. Expanded

Withholding taxes paid and accrued and/or withheld for the years ended December 31, 2023 and
2022 consists of:

Years Ended December 31 2023 2022

Balance at beginning of the year P
= 128,498 -
Withholding taxes incurred for the year 437,787 434,223
Total 566,285 434,223
Amount paid (461,084) (305,725)
Balance at the end of the year P
= 105,201 P
= 128,498

Year Ended December 31,2023 Tax base Amount paid

Withholding tax for goods purchased P
= 43,545,497 P
= 435,454
Withholding tax for services purchased 116,600 2,332
P
= 43,662,097 437,787
 -8-

d. Tax cases

The Proprietorship has no outstanding tax cases in any other court or bodies outside of the BIR
as of December 31, 2023.

Revenue Regulations (RR) No. 34-2020

The Proprietorship is not covered by the requirements and procedures for related party transactions under
Section 2 of RR No. 34-2020.