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Sample Problem Solving

1. Nicole's Advertising Agency had a net income of P256,780 - P103,450 - P12,000 - P12,860 - P7,770 = P120,700 for December. Current liabilities were P103,450 + P72,000 = P175,450. 2. For Santy Food Service to achieve a 40% profit increase, service income must be P890,000 * 1.4 / (1 - 0.2) = P1,236,000 3. Janine's additional investment for the period was P500,000 + P230,000 + P120,000 - P210,000 + P250,000 *

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Charles Tuazon
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106 views

Sample Problem Solving

1. Nicole's Advertising Agency had a net income of P256,780 - P103,450 - P12,000 - P12,860 - P7,770 = P120,700 for December. Current liabilities were P103,450 + P72,000 = P175,450. 2. For Santy Food Service to achieve a 40% profit increase, service income must be P890,000 * 1.4 / (1 - 0.2) = P1,236,000 3. Janine's additional investment for the period was P500,000 + P230,000 + P120,000 - P210,000 + P250,000 *

Uploaded by

Charles Tuazon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SAMPLE PROBLEM SOLVING

PROBLEM 1
Presented below are selected accounts exxtracted from Nicole’s Advertising Agency for the
month of December 2015:

Services rendered on cash basis for the month of December P256,780


Collection from customers for services to be rendered in the coming months 224,560
(services related to one-third of the amount were rendered this December)
Cost of employee salaries for the month of December which remains unpaid. 103,450
Advance rental payment for 6 months beginning January 2016 72,000
Cost of rent incurred and paid for December 12,000
Cost of supplies used by the agency in rendering services to clients 12,860
The agency’s MERALCO and PLDT bill for the month of December, still 7,770
unpaid

1. COMPUTE FOR THE NET INCOME OR NET LOSS OF NICOLE’S ADVERTISING AGENCY
FOR THE MONTH OF DECEMBER.
2. COMPUTE FOR TOTAL CURRENT LIABILITIES FROM THE ABOVE TRANSACTIONS, AS
OF THE END OF DECEMBER.

PROBLEM 2
Santy Food Service Center presented its income statement for the year ended December 31,
2015 as follows:

Service Income P890,000


Other Income 125,000
Total Expenses 750,000

Santy is not happy with the reported figures. For the coming year, he plans to earn a profit which
is forty percent more than the profit earned for the current year. With such goal, he estimated that
total expenses must only be twenty percent more than the total expenses incurred this year. Other
income on the other hand is estimated to be P20,000 less than the amount of other income earned
this year.

3. HOW MUCH SERVICE INCOME MUST SANTY EARN IN ORDER TO ACHIEVE TARGET
PROFITS?

PROBLEM 3
Janine established a laundry business last January 2013. After twelve months of operation,
Janine observed that her capital at the end of the accounting period was thrice as much when
she began the business. Janine only invested a few assets, specifically Cash P500,000, Office
Equipment P230,000 and Laundry Equipment P120,000 when the business was established. At
that time, the only liability Janine had was a P210,000 worth of Notes Payable. Janine reported
gross revenues of P250,000 and expenses which represents forty percent of the revenues
earned and withdrew cash for P24,000.

4. HOW MUCH WAS THE ADDITIONAL INVESTMENT MADE BY JANINE FOR THE
CURRENT ACCOUNTING PERIOD
PROBLEM 4
Presented below are some information obtained from the books Ninja Enterprises:

Total Assets, December 31 P2,540,000


Total Liabilities, December 31 1,230,000
Revenues 845,600
Expenses 345,000
Withdrawals 67,500
Additional Investment 100,400

5. HOW MUCH WAS NINJA ENTERPRISE’S CAPITAL AT THE BEGINNING OF THE YEAR?

PROBLEM 5
Claudine Spa and Wellness center reported the following liabilities as of September 30, 2013 (the
end of its fiscal year):

Notes Payable (2/3 of this balance is due 3 years after P900,000


Statement of Financial Position date)
Mortgage Payable (1/2 is due 2 years from Statement 800,000
of Financial Position date)
Unearned Service Income 87,500
Accrued Salaries Expense 250,000
Accounts Payable 195,000

6. HOW MUCH IS CLAUDINE SPA AND WELLNESS CENTER’S TOTAL NON-CURRENT


LIABILITIES AS OF SEPTEMBER 30, 2013?

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