SEVEN HEAVEN CORPORATION

Statement of Comprehensive Income

For the year ended December 31, 2019

Note
Revenue 2 43,529,129,118
Cost of Sales 3 (26,628,662,964)
Gross Profit 16,900,466,154
Selling and Administrative Expenses 4 (14,231,439,895)
Other Income 5 241,349,012
Income Before Income Tax 2,910,375,271
Income Tax Expense (873,112,581)
Net Income 2,037,262,690
 SEVEN HEAVEN CORPORATION
Statement of Changes in Shareholders' Equity
For the year ended December 31, 2019

Ordinary Shares 757,104,533

Reserves
Share Premium - Ordinary Shares 293,525,037
Accumulated Profits and Losses - Appropriated 5,100,000,000 5,393,525,037
Accumulated Profits and Losses 911,969,780
Shareholders' Equity, unadjusted 7,062,599,350
Adjustments
Net Income 2,031,615,954
Treasure Shares (2,923,246) 2,028,692,708.2
Total Shareholders' Equity 9,091,292,058.2
 SEVEN HEAVEN CORPORATION
Statement of Financial Position
As of December 31, 2019

ASSETS
Current Assets Note
Cash and Cash Equivalents 6 3,123,551,740.00
Short Term Investment 7 7,500,000.00
Trade and Other Receivables 8 1,637,846,048.00
Inventories 9 3,543,379,449.00
Prepayments 10 293,077,251.00
Total Current Assets 8,605,354,488.00

Noncurrent Assets
Property, Plant and Equipment 11 6,841,046,860.00
Intangible Assets 12 68,545,666.00
Other Noncurrent Assets 13 969,284,619.00
Total Noncurrent Assets 7,878,877,145.00

TOTAL ASSETS 16,484,231,633.00

LIABILITIES AND EQUITY

Current Liabilities Note
Trade and Other Payables 14 5,027,893,481.00
Bank Loan - Current Portion 371,666,667.00
Due to BIR 15 967,883,126.30
Accrued Expenses 16 338,091,025.00
Other Current Liabilities 17 50,892,394.00
Total Current Liabilities 6,756,426,693.30

Noncurrent Liabilities
Bank Loan - Long - Term 468,750,000.00
Other Noncurrent Liabilities 18 162,116,146.00
Total Noncurrent Liabilities 630,866,146.00

Total Liabilities 7,387,292,839.30

Shareholder's Equity
Ordinary Shares 757,104,533.00
Reserves 19 5,393,525,037.00
Accumulated Profit & Losses 20 2,949,232,469.70
Treasury Shares (2,923,246.00)
Total Shareholder's Equity 9,096,938,793.70

TOTAL LIABILITIES AND EQUITY 16,484,231,633.00

 NOTES TO FINANCIAL STATEMENTS

1. Nature of the Business

Seven Heaven Corporation is engaged in a mini-shop business. The business’ normal
course of operations include sale of both warehouse and store merchandise.

2. Net Sales
Revenue from Sales of Merchandise 39,709,088,663
Franchise Revenue 3,820,040,455
Total Sales 43,529,129,118

3. Cost of Sales
Inventory - Warehouse
Merchandise 521,488,236
Inventory - Store
Merchandise 2,226,423,939
Total Inventory, 1/1/19 2,747,912,175
Net Purchases
Purchases 30,000,000,000
Purchase Return &
Allowances 2,500,578,000
Purchase Discounts 131,442,534 (2,632,020,534) 27,367,979,466
Total Goods Available For
Sale 30,115,891,641
Total Inventory, 12/31/19
Inventory - Warehouse
Merchandise 2,226,423,939
Inventory - Store
Merchandise 1,316,955,510 (3,543,379,449)
Cost of Sales, unadjusted 26,572,512,192
Inventory Losses 56,150,772
Cost of Sales 26,628,662,964

COGS (Cost of Goods Sold) Method is used in accounting for inventory losses.
Accordingly, the amount of loss is added as an adjustment to the cost of sales in order to get
the correct amount.

4. Selling and Administrative Expenses

Selling Expenses
Advertising & Promotion Expense 592,278,843
Warehousing Services 525,062,094
Representation Expense 123,286,615 1,240,627,552
Administrative Expenses
Rent Expense 2,289,978,822
Utilities Expense 2,184,673,003
Depreciation & Amortization Expense 1,946,617,252
Salaries & Wages Expense 1,099,620,079
Agency Fees 3,146,767,713
 Trucking Expense 665,801,035
Repairs & Maintenance 496,506,636
Supplies Expense 373,485,078
Taxes & Licenses Expense 309,953,198
Transportation & Travel 106,337,423
Dues & Subscription 43,942,684
Insurance Expense 42,935,895
Miscellaneous Expense 284,193,525 12,990,812,343
Total Selling and Administrative Expenses 14,231,439,895

5. Other Income
Commission Income 241,349,012

6. Cash and Cash Equivalents

Cash in Bank - BPI - Savings 2,395,503,916
Cash in Bank - Metrobank - Current 15,000,000
Cash in Bank - Malayan Bank (Time Deposits - 60 days) 10,000,000
Total Cash in Bank, unadjusted 2,420,503,916
Bank Charges (23,114,916)
Total Cash in Bank 2,397,389,000
Cash on Hand 725,662,740
Petty Cash Fund 500,000
Total Cash and Cash Equivalents 3,123,551,740

7. Short Term Investment

Cash in Bank - Security Bank (Time Deposits - 6 months) 7,500,000

8. Trade and Other Receivables

Account Receivable - Franchisee ( 1 year) 1,012,921,622
Accounts Receivables - Store Operators 21,408,121
Total Accounts Receivable 1,034,329,743
Allowance for Uncollectible Accounts (50,809,719)
Net Realizable Value 983,520,024
Advances to Suppliers 607,406,844
Advances to Employees and Officers 39,796,457
Rent Receivable 5,138,327
Insurance Receivable 1,984,396
Total Trade and Other Receivables 1,637,846,048

9. Inventories
Inventory - Warehouse Merchandise 2,226,423,939
Inventory - Store Merchandise 1,316,955,510
Total Inventories 3,543,379,449
10. Prepayments
Prepaid - Rent 83,317,741
Prepaid - Taxes 29,577,097
Prepaid - Store Expenses 11,776,885
Prepaid - Gift Cards 7,418,417
Prepaid - Uniforms 12,072,708
Prepaid - Supplies 60,762,476
Prepaid - Insurance 88,151,927
Total Prepayments 293,077,251

11. Property, Plant and Equipment

Land 39,866,865
Buildings 155,481,144
Accumulated Depreciation - Building (36,320,303) 119,160,841
Store Furniture & Fixtures 6,431,935,800
Accumulated Depreciation - Store Furniture &
Fixtures (2,713,505,616) 3,718,430,184
Transportation Equipment 1,986,000,621
Accumulated Depreciation - Transportation
Equipment (928,604,662) 1,057,395,959
Store Equipment 633,089,650
Accumulated Depreciation – Store Equipment (271,440,314) 361,649,336
Leasehold Improvement 3,519,184,341
Accumulated Depreciation - Leasehold
Improvement (2,355,278,810) 1,163,905,531
Construction in Progress 380,638,144
Total Property, Plant and Equipment 6,841,046,860

12. Intangible Assets

Goodwill 65,567,524
Software and Program Costs 2,978,142
Total Intangible Assets 68,545,666

13. Other Noncurrent Assets

Cash in Bank - Bank of Commerce (Time Deposits - 3 years) 27,500,000
Account Receivable - Franchisee ( 2 years) 4,088,979
Deposits - Rent 617,589,112
Deposits - Utilities 104,998,914
Deposits - Others 18,822,533
Refundable Deposits 196,285,081
Total Other Noncurrent Assets 969,284,619

14. Trade and Other Payables

Accounts Payable 4,637,212,058
Securities Payable 45,175,073
Accounts Payable - Outsource Services 108,239,357
Others Short Term Payable 193,432,483
Service Fees Payable 43,834,510
Total Trade and Other Payables 5,027,893,481

15. Due to BIR

Output Vat Payable 273,809,973
Input Tax (265,904,906)
VAT Payable 7,905,067
Withholding Tax Payable - Expanded 82,625,460
Withholding Tax Payable - Compensation 4,240,018
Provision for Income Tax 873,112,581
Total Amount Due to BIR 967,883,126

16. Accrued Expenses

Accrued Rent Expense 174,551,467
Accrued Utilities Expense 132,136,706
Accrued Advertising Expense 23,336,087
Interest Expense 8,066,765
Total Accrued Expenses 338,091,025

17. Other Current Liabilities

Unearned Revenue 50,892,394

18. Other Noncurrent Liabilities

Employee Benefits 162,116,146

19. Reserves
Share Premium - Ordinary Shares 293,525,037
Accumulated Profit & Losses - Appropriated 5,100,000,000
Total Reserves 5,393,525,037

20. Accumulated Profits and Losses

Accumulated Profit & Losses 911,969,780
Net Income, 2019 2,037,262,690
Total Accumulated Profits and Losses 2,949,232,470
 University of San Jose-Recoletos
Magallanes St., Cebu City
College of Commerce

In partial fulfilment of the course:

Accounting 105: Intermediate Accounting 4
TTh – (6:00-7:30PM) – MC 428

Seven Heaven
Corporation
Annual Financial Reports

Submitted to:
Sir Ronnie Salazar

Submitted by:
Baoc, Hannah Michaelah
Bernabat, Abreen
Cabase, Raeniel Allyn
Cuyos, Katherine Marie
Ginoo,Mary Fe
Rosario, Kylie