NATURAL FORM INCOME STATEMENT Note 1 – Other Income

(SINGLE-STEP INCOME STATEMENT) Rent Income ₱30,000

Dividends Income 15,000
Gain on Sale of Equipment 10,000
Alex Bern Spa Interest Income 6,000
Income Statement Total 61,000
For year ended December 31, 2016
Note 2 – Depreciation Expense
Note Depreciation Expense – Building ₱15,000
Service Income ₱454,000 Depreciation Expense – Equipment 5,000
Other Income 1 61,000 Total ₱20,000
Total Income ₱515,000
Expenses Note 3 – Other Expense
Salaries ₱155,000 Loss on Sale of Furniture ₱4,000
Rent 85,000
2 20,000 Note 4 – Finance Cost
Depreciation Interest Expense – Mortgage ₱3,000
Supplies 5,000 Interest Expense – Loan 1,000
Insurance 2,000 Total ₱4,000
Other 3 4,000
Expense
Finance 4 4,000 275,000
Costs
Net Income ₱240,000
 INCOME STATEMENT
(MULTI-STEP INCOME STATEMENT) Note 1 – Net Sales
Gross Sales ₱782,000
Less: Sales Returns & Allowances ₱32,000
Ren Ren Merchandising Sales Discount 48,000 80,000
Income Statement Net Sales ₱702,000
For year ended December 31, 2016
Note 3 – Other Income
Note Interest Income ₱30,000
Rent Income 20,000
Net Sales 1 ₱702,000 Total ₱50,000
Cost of Sales 2 230,000
Gross Profit 472,000 Note 4 – Distribution Expense
Other Income 3 50,000 Sales Salaries Expense ₱52,000
Total Income 522,000 Depreciation Expense – Store Equipment 7,800
Operating Expenses Utilities Expense – Store 6,000
Distribution Expense 4 ₱65,000 Total 65,800
Administrative 5 43,400
Expense Note 5 – Administrative Expense
Other Expenses 6 2,600 Office Salaries Expense ₱34,000
Finance Cost 7 2,400 114,000 Utilities Expense – Office 4,400
Net Income ₱407,800 Office Supplies 3,000
Bad Debts Expense 2,000
Total ₱43,400

Note 6 – Other Expenses

Loss on Sale of Equipment ₱1,600
Discount Lost 1,000
Total ₱2,600

Note 7 – Finance Cost

Interest Expense ₱2,400
Note 2 – Cost of Sales
Merchandise Inventory, Beginning
Add: Net Cost of Purchases
Purchases ₱220,000
Less: Purchase Returns & Allowances ₱34,000
Less: Purchase Discount 26,000 60,000
Net Purchases ₱160,000
Add: Freight-In 10,000
Goods Available for Sale
Less: Merchandise Inventory, End
Cost of Sales
 ASSET SECTION Note 5 – Cash
(BALANCE SHEET) Cash on Hand ₱200,000
Cash in Bank 250,000
Total ₱450,000
Assets Note
Note 6 – Trade and Other
Current Assets Receivables
Cash 5 ₱450,000 Accounts Receivable ₱65,00
Investment in Trading Securities 75,000 0
Trade and Other Receivables 6 100,000 Less: Allowance for Bad Debts 5,000 ₱60,000
Merchandise Inventory 90,000 Notes Receivable 15,000
Prepaid Expenses 7 95,000 Interest Receivable 10,000
Total Current Assets ₱810,000 Advances to Employees 10,000
Accrued Income 5,000
Non-Current Assets Total ₱100,000
Property, Plant, and Equipment 8 700,000
Total Assets ₱1,510,000 Note 7 – Prepaid Expenses
Supplies ₱25,000
Prepaid Insurance 70,000
Total ₱95,000

Note 8 – Property, Plant and

Equipment
Land ₱180,000
Building ₱500,000
Less: Accumulated Depreciation 20,000 480,000
Equipment ₱50,000
Less: Accumulated Depreciation 20,000 30,000
Furniture & Fixtures 10,000
Total ₱700,000
 LIABILITIES SECTION
(BALANCE SHEET)

Liabilities & Owner’s Equity Note

Current Liabilities ₱430,000

Trade and Other Payables 9
Non-Current Liabilities
Mortgage Payable ₱300,000
Loan Payable 100,000
Total Non-Current 400,000
Liabilities
Total Liabilities ₱830,000
Owner’s Equity
Ren, Capital 680,000
Total Liabilities and Capital ₱1,510,000

Note 9 – Trade and Other Payables

Accounts Payable ₱250,000
Notes Payable 120,000
Accrued Expenses 60,000
Total ₱430,000