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07 Activity 1

The income statement would be the best financial statement for Shark Loans to use as the basis for deciding whether to approve Wendy Services' construction loan request. The plus of the income statement is that it shows an increase in net income from 250,000 in 200A to 550,000 in 200B, demonstrating the company's profitability and ability to repay loans. The minus of the balance sheet is that the company's liabilities have increased from 86,240 to 144,840, signaling potential cash flow issues. Therefore, based on the increasing profits shown on the income statement, Shark Loans should approve the loan request.

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155 views2 pages

07 Activity 1

The income statement would be the best financial statement for Shark Loans to use as the basis for deciding whether to approve Wendy Services' construction loan request. The plus of the income statement is that it shows an increase in net income from 250,000 in 200A to 550,000 in 200B, demonstrating the company's profitability and ability to repay loans. The minus of the balance sheet is that the company's liabilities have increased from 86,240 to 144,840, signaling potential cash flow issues. Therefore, based on the increasing profits shown on the income statement, Shark Loans should approve the loan request.

Uploaded by

jezrel mauricio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

GE1715

P-M-I CHART

Instruction: Respond to the scenario below by using the P-M-I Chart. Write your answers on the spaces
provided.

 In the Interesting box, write down some facts about the specific financial statement.

Scenario: Shark Loans received a request for a construction loan from Wendy Services Inc. This
construction loan will be used for the building of their fifth branch in Pasay. The company submitted their
statement of financial position and income statement. Help Shark Loans choose which financial
statement they would use as a basis on whether they will accept or reject Wendy Services Inc.’s request.
Refer to Page 2. Justify your decision.

Response 1: Statement of Financial Position Response 2: Income Statement

Plus Minus Plus Minus

Interesting Interesting

My Decision

07 Activity 1 *Property of STI


Page 1 of 2
WENDY SERVICES INC.
Balance Sheet
December 31
200A 200B
Assets
Cash ₱166,320.00 ₱332,640.00
Accounts Receivable 119,350.00 59,675.00
Office Supplies 5,775.00 5,775.00
Prepaid Insurance 15,400.00 15,400.00
Office Equipment 261,800.00 300,000.00
Accumulated Depreciation 53,900.00 207,900.00 61,500.00 238,500.00
Total Assets ₱514,745.00 ₱651,990.00

Liabilities and Owner's Equity


Accounts Payable ₱53,900.00 ₱107,800.00
Salary Payable 9,240.00 9,240.00
Unearned Revenue 23,100.00 27,800.00
Total Liabilities ₱86,240.00 ₱144,840.00

B. Sia-Ko, Capital 428,505.00 507,150.00


Total Liabilities and Owner's Equity ₱514,745.00 ₱651,990.00

WENDY SERVICES INC


Income Statement
December 31
200A 200B
Revenue:
Service Revenue ₱600,000.00 ₱900,000.00
Expenses:
Equipment rental expense ₱200,000.00 ₱200,000.00
Wages expense ₱90,000.00 ₱90,000.00
Utilities expense ₱60,000.00 ₱60,000.00
Total expenses ₱350,000.00 ₱350,000.00
Net Income ₱250,000.00 ₱550,000.00

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