Financial
Statement
Financial statements
are prepared by
summarizing all the
records of business
transactions following
the generally accepted
accounting principles.
A statement of financial position (or balance sheet) as the
PREPARING THE
A statement of comprehensive income for the periodic
A statement of changes in equity for the period
A statement of cash flows for the period
FINANCIAL Notes, comprising a summary of significant accounting p
A statement of financial position as at the beginning of th
STATEMENT
A completed set of financial statement
comprises:
STATEMENT OF In a single statement of comprehensive income
COMPREHENSIVE In two statements: a statement displaying compo
INCOME
An entity shall present all
items of income and
expense in a period:
The income statement is a statement
showing the performance of the
enterprise in a given period of time.
It summarizes the revenues earned
and expenses incurred for that
period of time.
6/22/20XX Pitch deck 3
STATEMENT OF
In the case of sole proprietorships, increases in owner's equity arise from additional investments by t
CHANGES IN
EQUITY
The statement of changes
in equity summarizes the
changes that occurred in
owner's equity.
The statement of financial STATEMENT OF
position is a statement that
shows the financial position or FIANANCIAL
condition of an entity by listing
the assets, liabilities and POSITION
owner's equity as at specific
date. The information needed
for this statement are the net
balances at the end of the
period. This statement is also
called the balance sheet.
The balance sheet can be
presented in either the report
format or the account format.
REPORT
The report format simply lists the assets, f
FORMAT
ACCOUNT The account format lists
FORMAT
STATEMENT The statement of cash flows provide
OF
CASHFLOW
CASHFLOW Receipts from sale of goods and performan
FROM
Receipts from royalties, fees, commissions
Payments to suppliers of goods and servic
OPERATING
ACTIVITIES
Receipts from sale of property and equipmen
CASHFLOW Receipts from sale of investments in debt or
Payments to acquite property and equipmen
FROM Payments to acquire debt or equity securitie
Payments to make loans to others generally
INVESTING Receipts from collection of loans to others ge
ACTIVITIES
CASHFLOW Receipts from investments by owners
FROM Receipts from issuance of notes payable pay
Payments to settle notes payable
FINANCING
ACTIVITIES
Worksheet
An accounting worksheet
is a tool used to help
bookkeepers and
accountants complete the
accounting cycle and
prepare year-end reports
like unadjusted trial
balances, adjusting journal
entries, adjusted trial
balances, and financial
statements.
Worksheet
The accounting
worksheet is a record
that summarizes the
effects of each
business transaction
following the different
steps of the
accounting cycle.
Del Mundo Advertising Agency
1. Investment of capital. Mr. Del Mundo invested 100,000 in his advertising agency.
2. Note Issued for cash. Mr. Del Mundo issued a Monte Bank Quezon City. This availment will be
used for the entity's working capital requirements. The note carriers a 20% interest per annum. Both
the interest and the principal are payable in fall in one year.
3. Rent paid in advance. Rented office space paying two months rent in advance , 8000.
4.Hired secretary with a pay of 6,000 every two weeks.
5. Equipment acquired for Cash. Acquired art equipment for 42,000.
6. Equipment acquired on Account. Acquired office equipment Fair and Square Emporium for
30,000; paying 15,000 in cash and the balance next month.
7. Supplies Purchased on Account. Purchased on credit art supplies for 18,000 and office
supplies for 8,000 in Batangas Supply Company
8. Insurance Paid in Advance. Paid 4,800 to Prudential Guarantee and Assurance, Inc. for a one
year insurance policy with coverage effective Jan 1.
9. Accounts Payable Partially Settled. Paid Batangas Supply Company 10,000 of the amount
owed.
10. Revenues Earned and Collected. Performed services for a car dealer by making ed
placements in the Buy and Sell magazine and collected fees of 14,000.
11. Salaries Paid. Paid the secretary's salary, 6,000.
12. Unearned revenues collected. Accepted 10,000 as an advance fee
for art work to be done for another agency.
13. Revenues Earned on account. Performed services by placing print
advertisements for Laurel Mega Arcade, 28,000.
14. Withdrawal by owner. Del Mundo withdrew 14,000 the personal
expenses
15. Salaries Paid. Paid the secretary two more weeks salary, 6,000.
16. Expenses Incurred and Paid. Paid the electricity bill of 1,000.
17. Expenses Incurred but unpaid. Received the ICC-Bayantel
Telephone Bill, 700.
18. Accounts Receivable Partially Collected. Collected 10,000 on
account from Laurel Mega Arcade for services already rendered.
Required. Established the following accounts:
Cash Accounts Receivable
Art Supplies
Office Supplies
Prepaid Rent
Prepaid Insurance
Art Equipment
Office Equipment
Notes Payable
Accounts Payable Unearned Art Revenues
Del Mundo Capital
Del Mundo Withdrawals
Advertising Revenues
Salaries Expense
Electricity Expense
Telecommunication Expense
DEFFERALS AND ACCRUALS
DEFFERALS
Is the postponement of the recognition of “an expense
already paid but not yet incurred” or of “a revenue already
collected but not yet earned”
ACCRUALS
Is the recognition of “an expense already incurred but
unpaid”, or revenues earned but uncollected.
ADJUSTMENT FOR DEFERRALS (STEP )
1. Prepaid Rent: The Del Mundo Advertising Agency paid 8000 for two months rent in advance
2. Prepaid Insurance: The Del Mundo Advertising Agency acquired a year insurance policy, paying 4800
premiums
3. Art Supplies and Office Supplies: The Del Mundo Advertising Agency purchased art supplies, 18000 and
office supplies 8000. The inventory count showed that art supplies costing 13000 and office supplies costing
6000 are still on hand
4. Art Equipment and Office Equipment: Acquired art equipment for 42000 and acquired office equipment from
Fair and Square Emporium for 30000. Estimated to last five years (60 months) and will be worthless at the
end of that time
5. Unearned Art Revenue: Received 10000 as an advance fee for art work to be done. Assume that by the end
of the month 4000 art work was done.
6. Accrued Salaries: The secretary was paid covering 10 working days. At month end, the secretary has
worked for three days beyond the last day period.
7. Accrued Interest: Mr. Del Mundo issued a promissory notes for a 30000 loan from Keppel Monte Bank-
Quezon City. This availment will be used for the entity’s working capital payable in full in one year.
8. Accrued Revenues: Suppose that the Del Mundo Advertising Agency agreed to placed a series of
advertising to Perez Tire Company and that the first appearance was on the last RECEIVABLE to reflect
amounts earned but not yet billed. The fee of 2000 for this advertisement is earned but unbilled.
Mateo Air Conditioning Services Mateo Air Conditioning Services
Income Statement Statement of Changes in Owners Equity
For the Month of September, 2017 For the Month of September, 2017
Revenues Mateo Capital Beginning 50,000.00
Repair Fees 108,000.00 Add: Net Income 82,900.00
Total Revenue 108,000.00 Total 132,900.00
Less:Expense Less: Withdrawal 12,000.00
Salaries Expense 13,800.00 Mateo Capital Ending 120,900.00
Supplies Expense 2,500.00
Rent Expense 8,000.00
Depreciation Expense 800.00
Total Expense 25,100.00
Net Income 82,900.00
Mateo Air Conditioning Services Mateo Air Conditioning Services
Statement of Financial Position Statement of Financial Position
As of September, 2017 As of September, 2017
Asset Cash Flows from Operating Activities
Current Asset Cash Receipt from Customer 50,000.00
Cash 23,800.00 Cash Payment of Expenses (27,200.00)
Accounts Payable 58,000.00 Net Cash Inflows from Operating Actvities 22,800.00
Supplies 4,700.00
Total Current Assets 86,500.00 Cash Flows from Investing Activities
Non Current Asset Cash Purchase of Equipment (37,000.00)
Office Equipment 75,000.00 Net Cash Outflows from Investing Actvities (37,000.00)
Accumulated Depreciation 800.00 74,200.00
Total Asset 160,700.00 Cash Flows from Financing Activities
Cash Investment of Owner 50,000.00
Liabilities & Owner's Equity Cash Withdrawal (12,000.00)
Accounts Payable 38,000.00 Net Cash Outflows from Financing Investment 38,000.00
Salaries Payable 1,800.00 Net Cash Inflows from Operating Actvities 23,800.00
Total Current Liabilities 39,800.00 Add: Cash Balance Beginning
Non Current Liabilities - Cash Balance End 23,800.00
Total Liabilities 39,800.00
Owners Equity
Mateo Capital 120,900.00
Total Liabilities & Owner's Equity 160,700.00
Del Mundo Advertising Agency
Income Statement
For the Month of Jan, 31 2016
Revnues
Advertising Revenue 44,000.00
Art Revenue 4,000.00
Total Revenue 48,000.00
Less: Expenses
Salaries Expense 13,800.00
Art Supplies Expense 5,000.00
Offi ce Supplies Expense 2,000.00
Rent Expense 4,000.00
Insurance Expense 400.00
Electricity Expense 1,000.00
Telemmunication Expense 700.00
Depreciation Expense Art Equipment 700.00
Depreciation Expense Offi ce Equipment 500.00
Interest Expense 500.00 28,600.00
Net Income 19,400.00
Del Mundo Advertising Agency
Statement of Changes in Owner's Equity
For the Month of Jan, 31 2016
Del Mundo Capital Beginning 100,000.00
Add: Capital -
100,000.00
Add: Net Income 19,400.00
Total 119,400.00
Less: Widrawal 14,000.00
Del Mundo Capital Ending 105,400.00
Del Mundo Advertising Agency
Statement of Financial Position
For the Month of Jan, 31 2016
Assets
Current Asset
Cash 57,200.00
Accounts Receivable 18,000.00
Fees Receivable 2,000.00
Art Supplies 13,000.00
Offi ce Supplies 6,000.00
Prepaid Rent 4,000.00
Prepaid Insurance 4,400.00
Total Current Assets 104,600.00
Non Current Assets
Art Equipment 42,000.00
Accumulated Depriciation-Art Equipment (700.00) 41,300.00
Offi ce Equipment 3,000.00
Account Depriciation - Offi ce Equipment (500.00) 29,500.00
Total Non Current Assets 70,800.00
Total Assets 175,400.00
Liabilities & Owner's Equity
Current Liabilities
Notes Payable 30,000.00
Accounts Payable 31,700.00
Salaries Payable 1,800.00
Interest Payable 500.00
Unearned Payable 6,000.00
Total Current Liability 70,000.00
-
70,000.00
Owner's Equity
Del Mundo Capital 105,400.00
Total Liabilities & Owner's Equity 175,400.00
Del Mundo Advertising Agency
Statement of Cash Flow
For the Month of Jan, 31 2016
Cash Flows from Operating Activities
Cash Receipt from Customer 34,000.00
Cash Payment of Expenses (35,800.00)
Net Cash Outflows from Operating Activities (1,800.00)
Cash Flows from Investing Activities
Cash purchased of Equipment (57,000.00)
Net Cash Outflows from Investing Activities (57,000.00)
Cash Flows from Financing Activities
Cash Investment of Owner 100,000.00
Borrowings 30,000.00
Cash Widrawals (14,000.00)
Net Cash Outflows from Financing Activities 116,000.00
Net Cash Inflows 57,000.00
