MASAY COMPANY

Statement of Cost of Goods Manufactured

Year Ended December 31, 2020

Raw materials, Jan. 1 ₱200,000.00

Purchases ₱3,000,000.00
Raw materials available for use ₱3,200,000.00
Raw materials, Dec. 31 (₱280,000.00)
Raw materials used ₱2,920,000.00
Direct labor ₱950,000.00
Factory overhead
Indirect labor ₱250,000.00
Superintendence ₱210,000.00
Light, heat and power ₱320,000.00
Rent – factory building ₱120,000.00
Repair and maintenance – building ₱50,000.00
Depreciation – machinery ₱60,000.00
Factory supplies used ₱110,000.00 ₱1,120,000.00
Total manufacturing cost ₱4,990,000.00
Goods in process, Jan. 1 ₱240,000.00
Total cost of goods put to process ₱5,230,000.00
Goods in process, Dec. 31 (₱170,000.00)
Cost of goods manufactured ₱5,060,000.00

Cost of Good Sold Method

MASAY COMPANY
Income Statement
For the Year Ended December 31, 2020

Net sales ₱7,450,000.00

Cost of goods sold (₱5,120,000.00)
Gross income ₱2,330,000.00
Other income ₱210,000.00
Total income ₱2,540,000.00
Expense
Distribution cost ₱830,000.00
Administrative expenses ₱590,000.00
Earthquake loss ₱300,000.00 (₱1,720,000.00)
Income before tax ₱820,000.00
Income expense (30% x P7,500,000) (₱2,250,000.00)
Income after tax (loss) (₱1,430,000.00)

Note 1 – Net Sales

Sales ₱7,500,000.00
Sales Returns and Allowances (₱50,000.00)
Net sales ₱7,450,000.00

Note 2 – Cost of Goods Sold

Finished goods, Jan. 1 ₱360,000.00
Cost of goods manufactured ₱5,060,000.00
Goods available for sale ₱5,420,000.00
Finished goods, Dec. 31 (₱300,000.00)
Cost of goods sold ₱5,120,000.00

Note 3 – Other Income

Gain on sale of equipment ₱100,000.00
Gains from expropriation ₱100,000.00
Interest income ₱10,000.00
Total other income ₱210,000.00

Note 4 – Distribution costs

Sales salaries ₱400,000.00
Advertising ₱160,000.00
Depreciation – store equipment ₱70,000.00
Delivery expense ₱200,000.00
Net purchases ₱830,000.00

Note 5 – Administrative Expenses

Office salaries ₱150,000.00
Depreciation – office equipment ₱40,000.00
Accounting and legal fees ₱150,000.00
Office expenses ₱250,000.00
Total administration expenses ₱590,000.00

Note 6 – Other Expense

Earthquake loss ₱300,000.00
Total other expense ₱300,000.00

Nature of Expense Method

MASAY COMPANY
Income Statement
For the Year Ended December 31, 2020

Net sales ₱7,450,000.00

Other income ₱210,000.00
Total income ₱7,660,000.00
Expenses
Decrease in inventory ₱130,000.00
Raw materials ₱2,920,000.00
Direct labor ₱950,000.00
Factory overhead ₱1,120,000.00
Salaries ₱550,000.00
Advertising ₱160,000.00
Depreciation ₱110,000.00
Delivery expenses ₱200,000.00
Accounting and legal fees ₱150,000.00
Earthquake loss ₱300,000.00
 Office expenses ₱250,000.00 (₱6,840,000.00)
Income before tax ₱820,000.00
Income tax expense (₱2,250,000.00)
Loss after tax (₱1,430,000.00)

Note 1 – Net Sales

Sales ₱7,500,000.00
Sales returns and allowances (₱50,000.00)
Net sales ₱7,450,000.00

Note 2 – Other Income

Gain on sale of equipment ₱100,000.00
Gains from expropriation ₱100,000.00
Interest income ₱10,000.00
Total other income ₱210,000.00

Note 3 – Decrease in Finished Goods and Goods in Process

Beginning End Decrease
₱360,000.00 ₱300,000.00 ₱60,000.00
₱240,000.00 ₱170,000.00 ₱70,000.00
₱600,000.00 ₱470,000.00 ₱130,000.00

Note 4 – Raw Materials Used

Raw materials, beg. ₱200,000.00
Purchases ₱3,000,000.00
Raw materailas available for use ₱3,200,000.00
Raw materials, end. (₱280,000.00)
Raw materials used ₱2,920,000.00

Note 5 – Factory Overhead

Indirect labor ₱250,000.00
Superintendence ₱210,000.00
Light, heat and power ₱320,000.00
Rent – factory building ₱120,000.00
Repair and maintenance – building ₱50,000.00
Depreciation – machinery ₱60,000.00
Factory supplies used ₱110,000.00
Total factory overhead ₱1,120,000.00

Note 6 – Salaries
Sales salaries ₱400,000.00
Office salaries ₱150,000.00
Total salaries ₱550,000.00

Note 7 – Depreciation
Depreciation – store equipment ₱70,000.00
Depreciation – office equipment ₱40,000.00
Total depreciation ₱110,000.00
 Note 8 – Other Expense
Earthquake loss ₱300,000.00
Total other expense ₱300,000.00

BERNA COMPANY
Income Statement
For the Year Ended December 31, 2020

Sales (P1,000,000 / 25%) ₱4,000,000.00

Cost of goods sold (45% x P4,000,000) (₱1,800,000.00)
Gross income ₱2,200,000.00
Expenses (30% x P4,000,000) (₱1,200,000.00)
Net income ₱1,000,000.00

Cost of goods sold (150% x 30%) 45.00%

Net income (100% - 45% - 30%) 25.00%

Purchases (P1,500,000 / 75) ₱2,000,000.00

Raw materials, Dec. 31 (₱500,000.00)
Raw materials used (50% x P3,000,000) ₱1,500,000.00
Direct labor (30% x P3,000,000) ₱900,000.00
Factory overhead (20% x P3,000,000) ₱600,000.00
Total manufacturing costs ₱3,000,000.00
Goods in process, Dec. 31 (1/3 x P2,250,000) (₱750,000.00)
Cost of goods manufactured ₱2,250,000.00
Finished goods, Dec. 31 (25% x P1,800,000) (₱450,000.00)
Cost of goods sold ₱1,800,000.00

BERNA COMPANY
Statement of Financial Position
December 31, 2020

ASSETS
Current assets
Cash ₱500,000.00
Accounts receivable (10% x P4,000,000) ₱400,000.00
Inventories ₱1,700,000.00
Total current assets ₱2,600,000.00

Non current assets

Property, pant and equipment ₱2,900,000.00
Total non current assets ₱2,900,000.00
Total assets ₱5,500,000.00

LIABILITIES
Accounts payable (25% x P2,000,000) ₱500,000.00
Total liabilities ₱500,000.00
EQUITY
Common stock, P100 par ₱2,500,000.00
Additional paid-in capital ₱1,500,000.00
Retained earnings ₱1,000,000.00
Total equity ₱5,000,000.00
Total liabilities and equity ₱5,500,000.00

Note 1 – Inventories
Raw materials, Dec. 31 ₱500,000.00
Goods in process, Dec. 31 (1/3 x P2,250,000) ₱750,000.00
Finished goods, Dec. 31 (25% x P1,800,000) ₱450,000.00
Total ₱1,700,000.00

Note 2 – Property, Plant and Equipment

Total cost ₱3,000,000.00
Accumulated depreciation (₱100,000.00)
Carrying amount ₱2,900,000.00

ROSE COMPANY
Statement of Comprehensive Income
December 31, 2020

Dividend income from investments ₱9,200,000.00

Distribution income from trusts ₱500,000.00
Interest income on deposits ₱700,000.00
Income from bank treasury bills ₱100,000.00
Income from dealing in securities and
derivatives held for trading, net ₱450,000.00
Other income ₱250,000.00
Total income ₱11,200,000.00
Expenses
Administrative staff costs ₱3,800,000.00
Sundry administrative costs ₱1,200,000.00
Finance cost ₱300,000.00 (₱5,300,000.00)
Income becore tax ₱5,900,000.00
Income tax expense (₱1,700,000.00)
Net income ₱4,200,000.00
Other comprehensive income to be reclassified
to profit of loss
Unrealized gain on forward contract designated
as cash flow hedge ₱400,000.00
Comprehensive income ₱4,600,000.00

RELIABLE COMPANY
Statement of Retained Earnings
Year Ended December 31, 2020

Retained earnings, Jan. 1 ₱200,000.00

Overdepreciation of 2019 due to prior period
error ₱100,000.00
Change from FiFO to weighted average – credit ₱150,000.00
Corrected beginning balance ₱450,000.00
Net income ₱1,300,000.00
Reduction in appropriation for treasury share ₱200,000.00
Total ₱1,950,000.00
Cash dividends paid to shareholders (₱500,000.00)
Current appropriation for contingencies (₱100,000.00)
Retained earnings, Dec. 31 ₱1,350,000.00

ANGOLA COMPANY
Comparative Income Statement
Years ended December 31, 2021 and 2020
2021 2020
Sales ₱6,000,000.00 ₱4,500,000.00
Cost of goods sold (₱2,900,000.00) (₱2,300,000.00)
Gross income ₱3,100,000.00 ₱2,200,000.00
Expenses (₱1,490,000.00) (₱1,800,000.00)
Net income ₱1,610,000.00 ₱400,000.00

ANGOLA COMPANY
Comparative Statement of Retained Earnings
Years ended December 31, 2021 and 2020
2021 2020
Retained earnings, Jan. 1 ₱1,250,000.00 ₱1,000,000.00
Net income ₱1,610,000.00 ₱400,000.00
Dividends paid (₱500,000.00) (₱150,000.00)
Retained earnings, Dec. 31 ₱2,360,000.00 ₱1,250,000.00

CARR COMPANY
Statement of Changes in Equity
Year Ended December 31, 2020
Ordinary Preference
Balances, Jan. 1 ₱5,150,000.00 ₱1,800,000.00
Retirement of treasury shares (₱150,000.00)
Property dividend
Dividend to preference
Error
Net income
Balances, Dec. 31 ₱5,000,000.00 ₱1,800,000.00
 PANY
nges in Equity
mber 31, 2020
Share Premium Retained Earnings Treasury Shares
₱3,590,000.00 ₱4,000,000.00 ₱270,000.00
(₱120,000.00) (₱270,000.00)
(₱750,000.00)
(₱180,000.00)
(₱325,000.00)
₱2,600,000.00
₱3,470,000.00 ₱5,345,000.00 ₱0.00