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Assignment #2: As of June 1 To June 30

Kaila opened a language center called KD Talk Foreign. From June 1-30, she invested and took out a loan totaling $250,000 each. She spent $350,000 on equipment and $65,000 on expenses. Her tuition revenues were $120,000, giving her a $55,000 profit. Her capital increased to $305,000 and she had a net cash flow of $205,000. Her assets were $555,000 against her liability and owner's equity.

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Maria Louella Magada
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80 views

Assignment #2: As of June 1 To June 30

Kaila opened a language center called KD Talk Foreign. From June 1-30, she invested and took out a loan totaling $250,000 each. She spent $350,000 on equipment and $65,000 on expenses. Her tuition revenues were $120,000, giving her a $55,000 profit. Her capital increased to $305,000 and she had a net cash flow of $205,000. Her assets were $555,000 against her liability and owner's equity.

Uploaded by

Maria Louella Magada
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT #2

C. Kaila opened a new business called “KD Talk Foreign.” This is a language center where
lessons are given for foreign languages like Mandarin, French, Italian, or Japanese. The
following business transactions took place from June 1 to June 30:
(1) The owner, Kaila, invested P250,000 in cash.
(2) She applied for a business bank loan and received P250,000 in cash.
(3) Paid cash of P350,000 for office equipment purchased.
(4) Received cash of P120,000 as tuition fee revenues.
(5) Paid cash for expenses: rent, P15,000; salary P20,000; and utility P30,000.

KD Talk Foreign
As of June 1 to June 30

Income Statement:
Revenues from Tuition Fees P 120,000
Less: Expenses: Rent (15,000)
Salary (20,000)
Utility (30,000)

Profit P 55,000

Capital Statement:
Kaila, Capital June 1 P 250,000
Add Profit 55,000
Kaila, Capital June 30 P 305,000
Statement of Cash Flows:
Cash inflows from: Investment P 250,000
Loan 250,000
Services Rendered 120,000
Total P 620,000
Cash outflows for: Equipment bought (350,000)
Expenses paid (65,000)

Net Cash Flow P 205,000

Statement of Financial Position


Assets: Cash P 205,000
Equipment 350,000
Total Assets P555,000
Liability: Loan from Bank P 250,000
Owner’s Equity: Kayla, Capital 305,000
Total Liability and Owner’s Equity P 555,000

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