28. The following selected adjusted account balances were taken from the worksheet of Simply Divine, distributor of crafts and frames, for the year ended December 31, 2014:

Debit Credit

Account title

C. Celis, Capital P220,000

C. Celis, withdrawals P 35,000

Sales 550,000

Sales Returns and Allowances 7,000

Sales Discounts 13,000

Purchases 200,000

Transportation In 10,000

Purchases Returns and Allowances 14,000

Purchases Discounts 16,000

Delivery Expense 45,000

Commission Expense 85,000

Sales Salaries Expense 130,000

Pag-ibig Premium Expense, Sales 2,400

SS & EC Premium Expense, Sales 8,248

Philhealth Premium Expense, Sales 1,500

Bad Debts 5,500

Insurance Expense 12,000

Office Salaries Expense 75,000

Pag-ibig Premium Expense, Office 1,200

SS & EC Premium Expense, office 5,668

PhilHealth Premium Expense, Office 900

Interest Income 8,000

Interest Expense 5,000

Beginning and closing stocks are P50,000 and P60,000, respectively.

Required: a. Prepare an income statement using the function of expense presentation format.

b. Prepare a capital statement.

C. Is the return on investment attractive considering that other investment alternatives

carry an ROE of 5% to 8%?