Solution to Exercise 3-11

Financial Statements Preparation

WINNER REPAIR SERVICE CENTER
Income Statement
For the Year Ended December 31, 2012
Revenues
Service Income P 88,000
Interest Income 2,000 P 90,000
Expenses
Salaries Expense P 20,000
Rent Expense 10,000
Utilities Expense 5,500
Repairs and Maintenance Expense 5,000
Supplies Expense 3,000
Depreciation Expense 1,500
Bad Debts Expense 1,000
Insurance Expense 1,000
Miscellaneous Expense 4,000 (51,000)
Net income P 39,000

WINNER REPAIR SERVICE CENTER

Statement of Changes in Equity
For the Year Ended December 31, 2012

R. Winner, Capital, January 1 P 92,050

Net income 39,000
Sub-total P 131,050
R. Winner, Drawing (10,000)
R. Winner, Capital, December 31 P 121,050
 WINNER REPAIR SERVICE CENTER
Statement of Financial Position
December 31, 2012
Notes
Assets
Current Assets
Cash P 18,000
Trade and other receivables 1 33,000
Prepaid expenses 2 9,300
Total current assets P 60,300
Non-current Assets
Property, plant, and equipment 3 85,000
Total Assets P 145,300

Liabilities and Owner's Equity

Current Liabilities
Trade and other payables 4 P 12,250
Non-current Liability
Notes Payable - due in 5 years 12,000
Total liabilities P 24,250

Owner's Equity
Mary, Capital 121,050

Total liabilities and owner's equity P 145,300

NOTES TO BALANCE SHEET

Note 1 - Trade and other receivables

Accounts Receivable P 20,000
Less: Allowance for Doubtful Accounts 2,000 P
Notes Receivable
Total trade and other receivables P

Note 2 - Prepaid expenses

Office Supplies P
Prepaid Insurance
Total prepaid expenses P

Note 3 - Property, plant, and equipment

Original Accumulated
Cost Depreciation
Equipment P 70,000 P 20,000 P
Furniture and Fixtures 40,000 5,000
Total P 110,000 P 25,000 P

Note 4 - Trade and other payables

Accounts Payable P
Salaries Payable
Total trade and other payables P
 18,000
15,000
33,000

6,800
2,500
9,300

Carrying
Amount
50,000
35,000
85,000

8,000
4,250
12,250