ABC Company was formed on January 1, 2020. The entity reported the following financial statements pertaining to the first year of operations: Income Statement Sales Cost of goods sold Inventory – January 1 Purchases P5,000,000 P1,000,000 3.100.000 P4,100,000 900.000) Goods available for sale Inventory – December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation Income before income tax Less: Income tax expense Net Income 3.200.000 P1,800,000 P 700,000 100.000 800.000 P1,000,000 350,000 P 650,000 Statement of Financial Position Assets Cash Accounts receivable Inventory Land P 500,000 600,000 900,000 800,000 Equipment (Life – 10 years) Accumulated depreciation Total assets P1,000,000 100.000 900.000 P3.700,000 Liabilities and Shareholders' Equity Accounts payable Notes payable Income tax payable P 500,000 400,000 350.000 P1,250,000 Share capital Retained Earnings Net Income Dividends P2,000,000 P 650,000 ( 200,000) 450.000 2.450.000 Total liabilities and shareholders' equity P3,700,000 Current cost information on December 31, 2020: Cost of goods sold at average current cost Inventory Land Equipment P3,500,000 1,000,000 1,500,000 1,600,000

ABC Company was formed on January 1, 2020. The entity reported the following financial statements pertaining to the first year of operations: Income Statement Sales Cost of goods sold Inventory – January 1 Purchases P5,000,000 P1,000,000 3.100.000 P4,100,000 900.000) Goods available for sale Inventory – December 31 Gross profit Operating expenses Expenses excluding depreciation Depreciation Income before income tax Less: Income tax expense Net Income 3.200.000 P1,800,000 P 700,000 100.000 800.000 P1,000,000 350,000 P 650,000 Statement of Financial Position Assets Cash Accounts receivable Inventory Land P 500,000 600,000 900,000 800,000 Equipment (Life – 10 years) Accumulated depreciation Total assets P1,000,000 100.000 900.000 P3.700,000 Liabilities and Shareholders' Equity Accounts payable Notes payable Income tax payable P 500,000 400,000 350.000 P1,250,000 Share capital Retained Earnings Net Income Dividends P2,000,000 P 650,000 ( 200,000) 450.000 2.450.000 Total liabilities and shareholders' equity P3,700,000 Current cost information on December 31, 2020: Cost of goods sold at average current cost Inventory Land Equipment P3,500,000 1,000,000 1,500,000 1,600,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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