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Acca110 Adorable Ac21 As03

The document provides financial information for Shadow Corporation for the years ending December 31, 20X4 and December 31, 20X5. It includes the statement of financial position as of 12/31/X4, income statement and additional accounting information for 20X5, statement of retained earnings for 20X5, and prepared statement of financial position as of 12/31/X5. The information must be used to prepare the required income statement, statement of retained earnings, and statement of financial position for 12/31/X5.

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Shaneen Adorable
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632 views6 pages

Acca110 Adorable Ac21 As03

The document provides financial information for Shadow Corporation for the years ending December 31, 20X4 and December 31, 20X5. It includes the statement of financial position as of 12/31/X4, income statement and additional accounting information for 20X5, statement of retained earnings for 20X5, and prepared statement of financial position as of 12/31/X5. The information must be used to prepare the required income statement, statement of retained earnings, and statement of financial position for 12/31/X5.

Uploaded by

Shaneen Adorable
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Background: For December 31, 20X4, the statement of financial position of Shadow Corporation is as follows:

ASSETS: LIABILITIES & OWNER'S EQ


Current Assets
Cash ₱ 10,000.00
Accounts Receivable ₱ 15,000.00
Inventory ₱ 25,000.00
Prepaid Expenses ₱ 12,000.00
Total Current Assets ₱ 62,000.00
Owner's Equity
Fixed Assets
Plant & Equipment (gross) ₱ 250,000.00
LESS: Accumulated depreciation ₱ (50,000.00)
Net plant & equipment ₱ (200,000.00)
TOTAL ASSETS ₱ 262,000.00 TOTAL LIABILITIES & OWN

Additional Information:
1) Accounts for 20X5:
Sales ₱ 220,000.00
Cost of Goods Sold 60% of sales
Administrative Expense ₱ 22,000.00
Depreciation Expense (beginning year) 8% of Plant & Equipment
2) Interest expenses for 12/31/14
On notes payable 10%
On bonds payable 12%
3) ₱ 2,000 in preferred stock dividends were paid.
4) ₱ 8,400 in dividends were paid to common stockholders.
5) There were 10,000 shares shares of common stock outstanding.
6) During 2015, the cash and prepaid expenses balance were unchanged.
7) Accounts receivable and inventory increased by 10%.
8) At 12/31/15, a new machine was purchased for ₱ 35,000.
9) Accounts payable increased by 25%.
10) At the end of the year, NP increased by ₱ 6,000 and the BP decreased by ₱ 10,000.
11) The common stock and paid-in capital in excess of par accounts did not change.

REQUIRED:
a) Prepare an income statement for 20X5.
b) Prepare a statement of retained earnings for 20X5.
c) Prepare a statement of financial position as of December 31, 20X5.
Corporation is as follows:

LIABILITIES & OWNER'S EQUITY


Liabilities
Accounts Payable ₱ 12,000.00
Notes Payable ₱ 20,000.00
Bonds Payable ₱ 50,000.00
Total Liabilities ₱ 82,000.00

Owner's Equity
Common Stock ₱ 75,000.00
Paid-in Capital ₱ 25,000.00
Retained Earnings ₱ 80,000.00
Total equity ₱ 180,000.00
TOTAL LIABILITIES & OWNER'S EQUITY ₱ 262,000.00
Shadow Corporation
Income Statement
For the Year 20X5

Sales ₱ 220,000.00
Cost of Goods Sold ₱ (132,000.00)
Gross Profit ₱ 88,000.00
Selling and Admin Expense ₱ (22,000.00)
Depreciation Expense (250,000 x 8%) ₱ (20,000.00)
Earnings before income tax (EBIT) ₱ 46,000.00

Interest Expenses:
On notes payable (10% of 20,000) ₱ (2,000.00)
On bonds payable (12% of 50,000) ₱ (6,000.00)
Earnings before taxes (EBT) ₱ 38,000.00
Taxes (20%) ₱ (7,000.00)
Earnings after taxes (EAT) ₱ 30,400.00
Shadow Corporation
Statement of Retained Earnings
For the Year 2015

Retained Earnings (20X4) ₱ 80,000.00


(+) Earning after tax ₱ 30,400.00
(-) Preferred Stock Dividend ₱ (2,000.00)
(-) Cash Dividend ₱ (8,400.00)
Retained Earnings (20X5) ₱ 100,000.00

Earning - Available to: = EAT - Preferred Stock Div


Common Stockholder = ₱ 30,400 - ₱ 2,000
= ₱ 28,400
Shares Outstanding = ₱ 10,000 shares
Earnings per share = ₱ 2.84
Shadow Corporation
Statement of Financial Position
As of December 31, 20X5

ASSETS
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expense
Current Assets

Fixed Assets
Plant (250,000 + 35,000) ₱ 285,000.00
(-) Accumulated Depreciation (50,000 + 20,000) ₱ (70,000.00)
Net Plant
Total Assets

LIABILITIES & OWNER'S EQUITY


Liabilities:
Accounts Payable (12,000 + 3,000)
Bonds Payable (50,000 - 10,000)
Notes Payable (20,000 + 6,000)
Total Liabilities

Owner's Equity:
Common Stock
Paid in Capital
Retained Earnings
Total Equity

Total Liabilities & Owner's Equity


₱ 10,000.00
₱ 16,500.00
₱ 27,500.00
₱ 12,000.00
₱ 66,000.00

₱ 215,000.00
₱ 281,000.00

₱ 15,000.00
₱ 40,000.00
₱ 26,000.00
₱ 81,000.00

₱ 75,000.00
₱ 25,000.00
₱ 100,000.00
₱ 200,000.00

₱ 281,000.00

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