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

 The total assets of  The total liabilities of  The service Revenue of  The expenses in 200A:
Wendy’s Services Inc. Wendy Services Inc. has Wendy’s Service INC. has 350,000.00 is higher than
has increased from increased from 200A: increased from the company’s income
200A: 514,745.00 to 86,240.00 to 200B: P600,000.00 to 200A: 250,000.00
200B: 661,990.00 114,840.00 P900,000.00.
 The Prepaid Insurance  The total expenses are all  Their net income in 200A
of the company is still  Their salary payable is the same from 200A to is lower than 200B
the same from 200A the same from 200A to 200B.
to 200B 200B  Their Net Income has
 The company’s office increased into
equipment and  The total Liabilities and 550,000.00 in 200B from
accumulated Owner’s Equity of the 250,000.00 in 200A
depreciation have company has increased
increased from 200A: in 200A: 514,745.00 to
207,900.00 to 200B: 651,990.00 Interesting
200B:288,500.00
 The company’s expenses from 200A to 200B are remain
Interesting
constant

 The company’s total assets, total liabilities and total LOE

in 200A are balance.
 In 200B, the company’s total assets, total liabilities and
total LOE are balanced

MY DECISION
They should accept the request of Wendy’s Services Inc. since their balance sheet shows how the company becomes
profitable in financial assets and capital. They should use the 200B basis as their best foundation for accepting a loan from
Shark Loan. Also, the
07 Activity 1 company's income statement is good, but it’s too risky to use since it is higher money involved.
*Property of STI So if
IThis
were the Shark Loan, they will choose the balance sheet of the Wendy’s Services
study source was downloaded by 100000857096141 from CourseHero.com on 11-22-2022 23:12:44 GMT -06:00Inc. to accept the Page 1 of
company’s 2 request
which is their construction loan, so that they will lend money to the company and start building their fifth branch in Pasay.
https://www.coursehero.com/file/120495295/SALAPA-P-M-I-CHARTdocx/
 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

This study source was downloaded by 100000857096141 from CourseHero.com on 11-22-2022 23:12:44 GMT -06:00

https://www.coursehero.com/file/120495295/SALAPA-P-M-I-CHARTdocx/
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