Prepare Journal entry and T- account

Requirement: Prepare: Journal entry and Trial balance for Notes, October, November, and December.

The Bigfork Company is a retail company that began operations on January 1,2018. The Bigfork Company is authorized to issue 1,000,000 shares of P10 par value ordinary share and 500,000 shares of 3%, P50 par value preferred share. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. The company uses a perpetual inventory system, FIFO method. The following is the trial balance of Bigfork Company as of September 30, 2022: Act Note No. Debit Credit (1) 0001 Property, Plant and Equipment, net 5,640,000 (2) 0002 Investment in bonds 3,766,720 0003 Cash in Bank 3,653,240 0004 Cost of Goods Sold 3,543,600 0005 Accounts Receivables 1,960,000 (3) 0006 Investment property 1,800,000 (4) 0007 Investment in Associate, at equity 1,200,000 0008 Sales Salaries 830,700 720,000 0009 Warranty Expense 0010 Merchandise Inventory 560,000 0011 Office Salaries 439,920 (5) 0012 Financial assets at Fair Value 408,000 0013 Utilities Expense - Store 121,875 (6) 0014 Prepaid Expenses - Store Insurance 90,000 0015 Utilities Expense - Admin 65,625 51,000 0016 Store Supplies Expenses 0017 Sales - Employer SSS, PHIC, & HDMF Expens 21,600 0018 Taxes and licences 20,000 0019 Office Supplies Expenses 20,000 (7) 0020 Life Insurance Expense 15,000 0021 Cash Surrender value 15,000 0022 Office - Employer SSS, PHIC, & HDMF Expen 10,800 10,000 0023 Advertising Expenses 0024 Interest Expense 9,600 0025 Sales 5,906,000 0026 Prefence Share Capital, 3%, P50 par 5,000,000 5,000,000 0027 Ordinary Share Capital, P10 par 0028 Retained Earnings 2,810,800 (8) 0029 Share premium - ordinary 2,000,000 0030 Bonds Payable 1,200,000 (9) 1,000,000 0031 Retained Earnings appropriated for contingencies 0032 Note payable, 8% due July 1, 2022 720,000 0033 Share premium - preference 500,000 420,000 (10) 0034 Accounts Payable 0035 Notes payable, 12%, due Dec 15, 2020 180,000 0036 Warranty liability 144,000 0037 Premium on Bonds Payable 42,240 (11) 0038 Allowance for doubtful accounts 39,200 (11) 0039 Employer SSS, PHIC, & HDMF Payable 3,600 (11) 0040 Employee SSS, PHIC, & HDMF Payable 3,600 0041 Employee Income Payable 3,240 0041 Accrued Interest Payable 0042 Accrued Interest Receivable 0043 Bank Charges 0044 Cash Dividend Payable 0045 Depreciation Expense - Admin 0046 Depreciation Expense - Store 0047 Dividend Income 0048 Doubtful accounts expense 0049 Financial assets at Fair Value - OCI 0050 Interest Income 0051 Investment Income 0020 Life Insurance Expense 0053 Miscellaneous Expense 0054 Miscellaneous Income 0055 Mortgage Payable 0056 Notes payable, 10% due Oct 1, 2021 0057 Retained Earnings appropriated for treasury shares 0058 Share Dividend Distributable 0059 Store Insurance Expense 0060 Treasury Shares, at cost 0061 Unrealized Gain - OCI 0062 Unrealized Loss - PL TOTAL 24,972,680 24,972,680 NOTES (1) Schedule of Property, Plant and Equipment: 01.01.2022 Property, plant and equipment 01.01.2022 Cost Accumulated Depreciation Carrying Amount Land 0 0 Office Building 2,400,000 480,000 1,920,000 Office Furniture and Fixtures 400,000 160,000 240,000 Store Building 3,600,000 720,000 2,880,000 Store Equipment 1,200,000 600,000 600,000 TOTAL 7,600,000 1,960,000 5,640,000 (2) The investment in the bonds of Manda Company was acquired on April 1, 2022 with a face amount of P4,000,000, for P3,766,720. The bonds mature on April 1, 2026 and pays 12% interest annually on April 1 with a 14% effective yield. The investment is to be held as financial asset at amortized cost. (3) The investment property is a vacant land that was acquired during 2020 and currently has undetermined use. (4) On January 1, 2022, Bigfork purchased 20,000 shares of Horizon Company, P30 par at P60 per share, representing 20% equity interest. At the time of acquisition, the net assets of the investee are fairly stated. (5) Bigfork purchased 10,000 shares of marketable equity securities of Lagoon Company on June 1, 2022, for p 408,000 and held these as financial assets for trading. (6) The one-year store insurance policy was purchased last October 1, 2021 for an annual premium of P120,000. (7) Bigfork insured the life of its president for P1,000,000, with annual premium of P15,000, the entity being the beneficiary of the ordinary life policy. The policy date was January 1, 2020 and carried the following cash surrender value: Cash surrender End of policy year value 2020 2021 2022 15,000 2023 21,000 2024 29,000 (8) The 3-year, P1,200,000 face amount, 10% bonds was issued by Bigfork on January 1, 2022 for P1,242,240, with an effective yield of 8%. The principal and interest are payable annually starting on December 31, 2022. (9) The P720,000 note payable was a 2-year, 8% promissory note, issued on July 1, 2022. Principal payment is due on maturity date but interest is payable every first of the month, beginning August 1, 2022. (10) The 12%, P 180,000 note payable was a 6-month promissory note, issued on June 15, 2022. Interest was payable at maturity date. (11) Bigfork has the following payroll information. All employees worked January 1 through December 31: Employee Share Employer Share Monthly Monthly Monthly Monthly Employee Designation Salary Income Tax w/heid SSS.PHIC & HDMF SSS, PHIC & HOME Mirabel Sales personne P22,100 255 600 600 Luisa Sales personnel 23.920 620 600 Camilo Sales personnel 22.880 410 600 600 Bruno Office personnel 24,180 670 600 600 Isabela Sales personnel 23.400 515 600 600 Antonio Office personnel 24.700 770 600 600 P141180 P3 240 P3,600 P3.600 600 The Bigfork Company is a retail company that began operations on January 1,2018. The Bigfork Company is authorized to issue 1,000,000 shares of P10 par value ordinary share and 500,000 shares of 3%, P50 par value preferred share. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. The company uses a perpetual inventory system, FIFO method. The following is the trial balance of Bigfork Company as of September 30, 2022: Act Note No. Debit Credit 5,640,000 3,766,720 (1) 0001 Property, Plant and Equipment, net (2) 0002 Investment in bonds 0003 Cash in Bank 0004 Cost of Goods Sold 0005 Accounts Receivables 3,653,240 3,543,600 1,960,000 (3) 0006 Investment property 1,800,000 (4) 0007 Investment in Associate, at equity 1,200,000 1,200,000 (4) 0007 Investment in Associate, at equity 0008 Sales Salaries 830,700 0009 Warranty Expense 720,000 560,000 439,920 408,000 121,875 90,000 0010 Merchandise Inventory 0011 Office Salaries (5) 0012 Financial assets at Fair Value 0013 Utilities Expense - Store (6) 0014 Prepaid Expenses - Store Insurance 0015 Utilities Expense - Admin 0016 Store Supplies Expenses 0017 Sales - Employer SSS, PHIC, & HDMF Expens 0018 Taxes and licences 0019 Office Supplies Expenses 65,625 51,000 21,600 20,000 20,000 20,000 15,000 15,000 10,800 10,000 0019 Office Supplies Expenses (7) 0020 Life Insurance Expense 0021 Cash Surrender value 0022 Office - Employer SSS, PHIC, & HDMF Expen 0023 Advertising Expenses 0024 Interest Expense 0025 Sales 0026 Prefence Share Capital, 3%, P50 par 0027 Ordinary Share Capital, P10 par 0028 Retained Earnings 9,600 5,906,000 5,000,000 5,000,000 2,810,800 2,000,000 1,200,000 1,000,000 720,000 500,000 420,000 (8) 0029 Share premium - ordinary 0030 Bonds Payable (9) 0031 Retained Earnings appropriated for contingencies 0032 Note payable, 8% due July 1, 2022 0033 Share premium - preference (10) 0034 Accounts Payable 0035 Notes payable, 12%, due Dec 15, 2020 0036 Warranty liability 0037 Premium on Bonds Payable (11) 0038 Allowance for doubtful accounts (11) 0039 Employer SSS, PHIC, & HDMF Payable (11) 0040 Employee SSS, PHIC, & HDMF Payable 180,000 144,000 42,240 39,200 3,600 3,600 0041 Employee Income Tax Payable 3,240 TOTAL 24,972,680 24,972,680 NOTES (1) Schedule of Property, Plant and Equipment: 01.01.2022 Property, plant and equipment 01.01.2022 Cost Accumulated Depreciation Carrying Amount Land 0 0 Office Building 2,400,000 480,000 1,920,000 Office Furniture and Fixtures 400,000 160,000 240,000 Store Building 3,600,000 720,000 2,880,000 Store Equipment 1,200,000 600,000 600,000 TOTAL 7,600,000 1,960,000 5,640,000 (2) The investment in the bonds of Manda Company was acquired on April 1, 2022 with a face amount of P4,000,000, for P3,766,720. The bonds mature on April 1, 2026 and pays 12% interest annually on April 1 with a 14% effective yield. The investment is to be held as financial asset at amortized cost. April ective and pays annually yield. The investment is to be held as financial asset at amortized cost. (3) The investment property is a vacant land that was acquired during 2020 and currently has undetermined use. (4) On January 1, 2022, Bigfork purchased 20,000 shares of Horizon Company, P30 par at P60 per share, representing 20% equity interest. At the time of acquisition, the net assets of the investee are fairly stated. (5) Bigfork purchased 10,000 shares of marketable equity securities of Lagoon Company on June 1, 2022, for p 408,000 and held these as financial assets for trading. (6) The one-year store insurance policy was purchased last October 1, 2021 for an annual premium of P120,000. (7) Bigfork insured the life of its president for P1,000,000, with annual premium of P15,000, the entity being the beneficiary of the ordinary life policy. The policy date was January 1, 2020 and carried the following cash surrender value: Cash surrender End of policy year value 2020 2021 2022 15,000 2023 21,000 2024 29,000 (8) The 3-year, P1,200,000 face amount, 10% bonds was issued by Bigfork on January 1, 2022 for P1,242,240, with an effective yield of 8%. The principal and interest are payable annually starting on December 31, 2022. (9) The P720,000 note payable was a 2-year, 8% promissory note, issued on July 1, 2022. Principal payment is due on maturity date but interest is payable every first of the month, beginning August 1, 2022. (10) The 12%, P180,000 note payable was a 6-month promissory note, issued on June 15, 2022. Interest was payable at maturity date. (11) Bigfork has the following payroll information. All employees worked January 1 through December 31: Employee Share Employer Share Monthly Monthly Monthly Monthly Employee Designation Salary Income Tax w/held $55. PHIC & HOMF SSS, PHIC 8 HOME Mirabel Sales personnel P22,100 255 600 600 Luisa Sales personnel 23.920 620 600 600 Camilo Sales personnel 22.880 410 600 600 Bruno Office personnel 24.180 670 600 600 Isabela Sales personnel 23.400 515 600 600 Antonio Office personnel 24,700 770 600 600 P141180 P3 240 P3,600 P3600 The Bigfork Company completed the following transactions during the last quarter of 2022: OCTOBER 2020 1. Issued 100,000 shares of P10 par value ordinary share for cash of P15 per share. 2. Issued 30,000 preference shares for cash of P60 per share. 3. Issued a P2,400,000, 10-year, 9% mortgage payable for land with an existing store building. Mortgage payments of P20,000 plus interest based on the outstanding balance of mortgage are due on the first day of each month, beginning November 1. The assets had the following market values: Land, P200,000; Building, P800,000. 4. Issued a one-year, 10% note payable for P100,000 for office fixtures. The principal and interest are due a October 1, 2023. 5. Paid the renewal of annual store insurance premium of P120,000. 6. Paid interest due on the 8% note payable issued last July 1, 2022. 7. Purchased merchandise inventory on account for P1,250,000, terms n/30. 8. Paid P400,000 of accounts payable 9. Collected 80% of accounts receivables. 10. Paid P16,000 for utilities. 11. Paid all liabilities associated with the September 30 payroll. 12. Received a cash dividend of P1.60 per share from Lagoon Company. 13. Recorded cash sales for the month of P560,000 and credit sales of P1,290,000. The cost of the goods sold was P1,100,000 and estimated warranty payable was 8%. 14. Recorded October payroll and paid employees. 15. Accrued employer additional payroll contributions for October. NOVEMBER 2020 1. Paid the first mortgage payment. 2. Purchased 6,000 ordinary shares at P110 per share of Jack Source Co. as a long-term investment, representing 4% ownership. Bigfork irrevocably designate this investment at fair value through other comprehensive income. 3. Paid interest due on the 8% note payable issued last July 1, 2022. 4. Paid suppliers for merchandise inventory purchased on October 3. 5. Purchased merchandise inventory on account for P1,500,000, terms n/30. 6. Collected 80% of accounts receivable. 7. Purchased 50,000 ordinary shares as treasury for P16 per share. These shares were originally issued for P14 per share. 8. Paid all liabilities associated with the October 31 payroll. 9. Paid P60,000 to satisfy warranty claims. 10. Declared cash dividends of P2 per outstanding share to ordinary shareholders and the preference dividends at the preference rate. 11. Paid P24,500 for utilities. 12. Received a cash dividend of P6.6 per share on the Jack investment. 13. Paid the cash dividends declared on November 17. 14. Recorded cash sales for the month of P420,000 and credit sales of P980,000 The cost of the goods sold was P840,000 and estimated warranty payable was 8%. 15. Recorded November payroll and paid employees. 16. Accrued employer additional payroll contributions for November. DECEMBER 2020 1. Paid the second mortgage payment. 2. Paid interest due on the 8% note payable issued last July 1, 2022. 3. Received a cash dividend of P4.80 per share from Horizon Company. 4. Paid suppliers for merchandise inventory purchased on November 10. 5. Collected 80% of accounts receivable. 6. Paid P100,000 to satisfy warranty claims. 7. Sold 30,000 shares of treasury share for P15 per share. 8. Paid all liabilities associated with the November 30 payroll. 9. Paid the principal and interests of the note payable issued last June 15, 2022. 10. Declared a 10% share dividend to all outstanding ordinary shares to be distributed on December 30, 2022 to shareholders of record December 24, 2022. The market value of the shares as of declaration date is P16 per share. 11. Paid P22,000 for utilities. 12. Purchased merchandise inventory on account for P900,000, terms 1/30. 13. Distribute the share dividends. 14. Recorded cash sales for the month of P630,000 and credit sales of P1,470,000 The cost of the goods sold was P1,260,000 and estimated warranty payable was 8%. 15. Recorded December payroll and paid employees. 16. Accrued employer additional payroll contributions for December. 17. Paid the first series of the 10% P1,200,000 bonds and the annual interest. 18. A physical inventory count conducted revealed total cost of P1,000,000. The entity also determined that the net realizable value of inventory was P1,100,000. 19. The bank statement as of December 31, 2022 showed a balance of P5,973,670.00. Upon comparing the statement with the cash records, the following facts were determined: a. The bank debited service charges for December of P10,000. b. Receipts for December 31, 2022 for P500,000 were not recorded by bank until January 2, 2023. C. Checks outstanding on December 31, 2022 totaled P685,000 d. Amount erroneously credited by bank to Bigfork's account, P150,000 20. The following year-end market values are determined for all of Bigfork's investments as well as their reported earnings: Investment in Lagoon Company Horizon Company Manda Company Jack Source Company Market Value P 40 per share P62 per share 99% of face amount P 112 per share Net Income (Loss) P 2,000,000 3,000,000.00 (1,500,000.00) 6,000,000.00 The following are the accounting policies of Bigfork Company: 1. 1. Investment properties are measured using cost model 2. A full year depreciation is taken in the year of acquisition and no depreciation is taken in the year of disposition. 3. The accounting policy is to report inventory at lower of cost and net realizable value applied to total inventory. Cost is determined under the first-in, first-out method. The entity used the direct write-off method of recording inventory write-down. Any inventory loss will be charged directly to cost of goods sold account. 4. In estimating allowance for doubtful accounts, the entity used percentage of accounts receivables. The policy is to maintain an allowance for doubtful accounts equal to 10% of the outstanding accounts receivable. The Bigfork Company is a retail company that began operations on January 1,2018. The Bigfork Company is authorized to issue 1,000,000 shares of P10 par value ordinary share and 500,000 shares of 3%, P50 par value preferred share. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. The company uses a perpetual inventory system, FIFO method. The following is the trial balance of Bigfork Company as of September 30, 2022: Act Note No. Debit Credit (1) 0001 Property, Plant and Equipment, net 5,640,000 (2) 0002 Investment in bonds 3,766,720 0003 Cash in Bank 3,653,240 0004 Cost of Goods Sold 3,543,600 0005 Accounts Receivables 1,960,000 (3) 0006 Investment property 1,800,000 (4) 0007 Investment in Associate, at equity 1,200,000 0008 Sales Salaries 830,700 720,000 0009 Warranty Expense 0010 Merchandise Inventory 560,000 0011 Office Salaries 439,920 (5) 0012 Financial assets at Fair Value 408,000 0013 Utilities Expense - Store 121,875 (6) 0014 Prepaid Expenses - Store Insurance 90,000 0015 Utilities Expense - Admin 65,625 51,000 0016 Store Supplies Expenses 0017 Sales - Employer SSS, PHIC, & HDMF Expens 21,600 0018 Taxes and licences 20,000 0019 Office Supplies Expenses 20,000 (7) 0020 Life Insurance Expense 15,000 0021 Cash Surrender value 15,000 0022 Office - Employer SSS, PHIC, & HDMF Expen 10,800 10,000 0023 Advertising Expenses 0024 Interest Expense 9,600 0025 Sales 5,906,000 0026 Prefence Share Capital, 3%, P50 par 5,000,000 5,000,000 0027 Ordinary Share Capital, P10 par 0028 Retained Earnings 2,810,800 (8) 0029 Share premium - ordinary 2,000,000 0030 Bonds Payable 1,200,000 (9) 1,000,000 0031 Retained Earnings appropriated for contingencies 0032 Note payable, 8% due July 1, 2022 720,000 0033 Share premium - preference 500,000 420,000 (10) 0034 Accounts Payable 0035 Notes payable, 12%, due Dec 15, 2020 180,000 0036 Warranty liability 144,000 0037 Premium on Bonds Payable 42,240 (11) 0038 Allowance for doubtful accounts 39,200 (11) 0039 Employer SSS, PHIC, & HDMF Payable 3,600 (11) 0040 Employee SSS, PHIC, & HDMF Payable 3,600 0041 Employee Income Payable 3,240 0041 Accrued Interest Payable 0042 Accrued Interest Receivable 0043 Bank Charges 0044 Cash Dividend Payable 0045 Depreciation Expense - Admin 0046 Depreciation Expense - Store 0047 Dividend Income 0048 Doubtful accounts expense 0049 Financial assets at Fair Value - OCI 0050 Interest Income 0051 Investment Income 0020 Life Insurance Expense 0053 Miscellaneous Expense 0054 Miscellaneous Income 0055 Mortgage Payable 0056 Notes payable, 10% due Oct 1, 2021 0057 Retained Earnings appropriated for treasury shares 0058 Share Dividend Distributable 0059 Store Insurance Expense 0060 Treasury Shares, at cost 0061 Unrealized Gain - OCI 0062 Unrealized Loss - PL TOTAL 24,972,680 24,972,680 NOTES (1) Schedule of Property, Plant and Equipment: 01.01.2022 Property, plant and equipment 01.01.2022 Cost Accumulated Depreciation Carrying Amount Land 0 0 Office Building 2,400,000 480,000 1,920,000 Office Furniture and Fixtures 400,000 160,000 240,000 Store Building 3,600,000 720,000 2,880,000 Store Equipment 1,200,000 600,000 600,000 TOTAL 7,600,000 1,960,000 5,640,000 (2) The investment in the bonds of Manda Company was acquired on April 1, 2022 with a face amount of P4,000,000, for P3,766,720. The bonds mature on April 1, 2026 and pays 12% interest annually on April 1 with a 14% effective yield. The investment is to be held as financial asset at amortized cost. (3) The investment property is a vacant land that was acquired during 2020 and currently has undetermined use. (4) On January 1, 2022, Bigfork purchased 20,000 shares of Horizon Company, P30 par at P60 per share, representing 20% equity interest. At the time of acquisition, the net assets of the investee are fairly stated. (5) Bigfork purchased 10,000 shares of marketable equity securities of Lagoon Company on June 1, 2022, for p 408,000 and held these as financial assets for trading. (6) The one-year store insurance policy was purchased last October 1, 2021 for an annual premium of P120,000. (7) Bigfork insured the life of its president for P1,000,000, with annual premium of P15,000, the entity being the beneficiary of the ordinary life policy. The policy date was January 1, 2020 and carried the following cash surrender value: Cash surrender End of policy year value 2020 2021 2022 15,000 2023 21,000 2024 29,000 (8) The 3-year, P1,200,000 face amount, 10% bonds was issued by Bigfork on January 1, 2022 for P1,242,240, with an effective yield of 8%. The principal and interest are payable annually starting on December 31, 2022. (9) The P720,000 note payable was a 2-year, 8% promissory note, issued on July 1, 2022. Principal payment is due on maturity date but interest is payable every first of the month, beginning August 1, 2022. (10) The 12%, P 180,000 note payable was a 6-month promissory note, issued on June 15, 2022. Interest was payable at maturity date. (11) Bigfork has the following payroll information. All employees worked January 1 through December 31: Employee Share Employer Share Monthly Monthly Monthly Monthly Employee Designation Salary Income Tax w/heid SSS.PHIC & HDMF SSS, PHIC & HOME Mirabel Sales personne P22,100 255 600 600 Luisa Sales personnel 23.920 620 600 Camilo Sales personnel 22.880 410 600 600 Bruno Office personnel 24,180 670 600 600 Isabela Sales personnel 23.400 515 600 600 Antonio Office personnel 24.700 770 600 600 P141180 P3 240 P3,600 P3.600 600 The Bigfork Company is a retail company that began operations on January 1,2018. The Bigfork Company is authorized to issue 1,000,000 shares of P10 par value ordinary share and 500,000 shares of 3%, P50 par value preferred share. The company sells a product that includes a one-year warranty and records estimated warranty payable each month. The company uses a perpetual inventory system, FIFO method. The following is the trial balance of Bigfork Company as of September 30, 2022: Act Note No. Debit Credit 5,640,000 3,766,720 (1) 0001 Property, Plant and Equipment, net (2) 0002 Investment in bonds 0003 Cash in Bank 0004 Cost of Goods Sold 0005 Accounts Receivables 3,653,240 3,543,600 1,960,000 (3) 0006 Investment property 1,800,000 (4) 0007 Investment in Associate, at equity 1,200,000 1,200,000 (4) 0007 Investment in Associate, at equity 0008 Sales Salaries 830,700 0009 Warranty Expense 720,000 560,000 439,920 408,000 121,875 90,000 0010 Merchandise Inventory 0011 Office Salaries (5) 0012 Financial assets at Fair Value 0013 Utilities Expense - Store (6) 0014 Prepaid Expenses - Store Insurance 0015 Utilities Expense - Admin 0016 Store Supplies Expenses 0017 Sales - Employer SSS, PHIC, & HDMF Expens 0018 Taxes and licences 0019 Office Supplies Expenses 65,625 51,000 21,600 20,000 20,000 20,000 15,000 15,000 10,800 10,000 0019 Office Supplies Expenses (7) 0020 Life Insurance Expense 0021 Cash Surrender value 0022 Office - Employer SSS, PHIC, & HDMF Expen 0023 Advertising Expenses 0024 Interest Expense 0025 Sales 0026 Prefence Share Capital, 3%, P50 par 0027 Ordinary Share Capital, P10 par 0028 Retained Earnings 9,600 5,906,000 5,000,000 5,000,000 2,810,800 2,000,000 1,200,000 1,000,000 720,000 500,000 420,000 (8) 0029 Share premium - ordinary 0030 Bonds Payable (9) 0031 Retained Earnings appropriated for contingencies 0032 Note payable, 8% due July 1, 2022 0033 Share premium - preference (10) 0034 Accounts Payable 0035 Notes payable, 12%, due Dec 15, 2020 0036 Warranty liability 0037 Premium on Bonds Payable (11) 0038 Allowance for doubtful accounts (11) 0039 Employer SSS, PHIC, & HDMF Payable (11) 0040 Employee SSS, PHIC, & HDMF Payable 180,000 144,000 42,240 39,200 3,600 3,600 0041 Employee Income Tax Payable 3,240 TOTAL 24,972,680 24,972,680 NOTES (1) Schedule of Property, Plant and Equipment: 01.01.2022 Property, plant and equipment 01.01.2022 Cost Accumulated Depreciation Carrying Amount Land 0 0 Office Building 2,400,000 480,000 1,920,000 Office Furniture and Fixtures 400,000 160,000 240,000 Store Building 3,600,000 720,000 2,880,000 Store Equipment 1,200,000 600,000 600,000 TOTAL 7,600,000 1,960,000 5,640,000 (2) The investment in the bonds of Manda Company was acquired on April 1, 2022 with a face amount of P4,000,000, for P3,766,720. The bonds mature on April 1, 2026 and pays 12% interest annually on April 1 with a 14% effective yield. The investment is to be held as financial asset at amortized cost. April ective and pays annually yield. The investment is to be held as financial asset at amortized cost. (3) The investment property is a vacant land that was acquired during 2020 and currently has undetermined use. (4) On January 1, 2022, Bigfork purchased 20,000 shares of Horizon Company, P30 par at P60 per share, representing 20% equity interest. At the time of acquisition, the net assets of the investee are fairly stated. (5) Bigfork purchased 10,000 shares of marketable equity securities of Lagoon Company on June 1, 2022, for p 408,000 and held these as financial assets for trading. (6) The one-year store insurance policy was purchased last October 1, 2021 for an annual premium of P120,000. (7) Bigfork insured the life of its president for P1,000,000, with annual premium of P15,000, the entity being the beneficiary of the ordinary life policy. The policy date was January 1, 2020 and carried the following cash surrender value: Cash surrender End of policy year value 2020 2021 2022 15,000 2023 21,000 2024 29,000 (8) The 3-year, P1,200,000 face amount, 10% bonds was issued by Bigfork on January 1, 2022 for P1,242,240, with an effective yield of 8%. The principal and interest are payable annually starting on December 31, 2022. (9) The P720,000 note payable was a 2-year, 8% promissory note, issued on July 1, 2022. Principal payment is due on maturity date but interest is payable every first of the month, beginning August 1, 2022. (10) The 12%, P180,000 note payable was a 6-month promissory note, issued on June 15, 2022. Interest was payable at maturity date. (11) Bigfork has the following payroll information. All employees worked January 1 through December 31: Employee Share Employer Share Monthly Monthly Monthly Monthly Employee Designation Salary Income Tax w/held $55. PHIC & HOMF SSS, PHIC 8 HOME Mirabel Sales personnel P22,100 255 600 600 Luisa Sales personnel 23.920 620 600 600 Camilo Sales personnel 22.880 410 600 600 Bruno Office personnel 24.180 670 600 600 Isabela Sales personnel 23.400 515 600 600 Antonio Office personnel 24,700 770 600 600 P141180 P3 240 P3,600 P3600 The Bigfork Company completed the following transactions during the last quarter of 2022: OCTOBER 2020 1. Issued 100,000 shares of P10 par value ordinary share for cash of P15 per share. 2. Issued 30,000 preference shares for cash of P60 per share. 3. Issued a P2,400,000, 10-year, 9% mortgage payable for land with an existing store building. Mortgage payments of P20,000 plus interest based on the outstanding balance of mortgage are due on the first day of each month, beginning November 1. The assets had the following market values: Land, P200,000; Building, P800,000. 4. Issued a one-year, 10% note payable for P100,000 for office fixtures. The principal and interest are due a October 1, 2023. 5. Paid the renewal of annual store insurance premium of P120,000. 6. Paid interest due on the 8% note payable issued last July 1, 2022. 7. Purchased merchandise inventory on account for P1,250,000, terms n/30. 8. Paid P400,000 of accounts payable 9. Collected 80% of accounts receivables. 10. Paid P16,000 for utilities. 11. Paid all liabilities associated with the September 30 payroll. 12. Received a cash dividend of P1.60 per share from Lagoon Company. 13. Recorded cash sales for the month of P560,000 and credit sales of P1,290,000. The cost of the goods sold was P1,100,000 and estimated warranty payable was 8%. 14. Recorded October payroll and paid employees. 15. Accrued employer additional payroll contributions for October. NOVEMBER 2020 1. Paid the first mortgage payment. 2. Purchased 6,000 ordinary shares at P110 per share of Jack Source Co. as a long-term investment, representing 4% ownership. Bigfork irrevocably designate this investment at fair value through other comprehensive income. 3. Paid interest due on the 8% note payable issued last July 1, 2022. 4. Paid suppliers for merchandise inventory purchased on October 3. 5. Purchased merchandise inventory on account for P1,500,000, terms n/30. 6. Collected 80% of accounts receivable. 7. Purchased 50,000 ordinary shares as treasury for P16 per share. These shares were originally issued for P14 per share. 8. Paid all liabilities associated with the October 31 payroll. 9. Paid P60,000 to satisfy warranty claims. 10. Declared cash dividends of P2 per outstanding share to ordinary shareholders and the preference dividends at the preference rate. 11. Paid P24,500 for utilities. 12. Received a cash dividend of P6.6 per share on the Jack investment. 13. Paid the cash dividends declared on November 17. 14. Recorded cash sales for the month of P420,000 and credit sales of P980,000 The cost of the goods sold was P840,000 and estimated warranty payable was 8%. 15. Recorded November payroll and paid employees. 16. Accrued employer additional payroll contributions for November. DECEMBER 2020 1. Paid the second mortgage payment. 2. Paid interest due on the 8% note payable issued last July 1, 2022. 3. Received a cash dividend of P4.80 per share from Horizon Company. 4. Paid suppliers for merchandise inventory purchased on November 10. 5. Collected 80% of accounts receivable. 6. Paid P100,000 to satisfy warranty claims. 7. Sold 30,000 shares of treasury share for P15 per share. 8. Paid all liabilities associated with the November 30 payroll. 9. Paid the principal and interests of the note payable issued last June 15, 2022. 10. Declared a 10% share dividend to all outstanding ordinary shares to be distributed on December 30, 2022 to shareholders of record December 24, 2022. The market value of the shares as of declaration date is P16 per share. 11. Paid P22,000 for utilities. 12. Purchased merchandise inventory on account for P900,000, terms 1/30. 13. Distribute the share dividends. 14. Recorded cash sales for the month of P630,000 and credit sales of P1,470,000 The cost of the goods sold was P1,260,000 and estimated warranty payable was 8%. 15. Recorded December payroll and paid employees. 16. Accrued employer additional payroll contributions for December. 17. Paid the first series of the 10% P1,200,000 bonds and the annual interest. 18. A physical inventory count conducted revealed total cost of P1,000,000. The entity also determined that the net realizable value of inventory was P1,100,000. 19. The bank statement as of December 31, 2022 showed a balance of P5,973,670.00. Upon comparing the statement with the cash records, the following facts were determined: a. The bank debited service charges for December of P10,000. b. Receipts for December 31, 2022 for P500,000 were not recorded by bank until January 2, 2023. C. Checks outstanding on December 31, 2022 totaled P685,000 d. Amount erroneously credited by bank to Bigfork's account, P150,000 20. The following year-end market values are determined for all of Bigfork's investments as well as their reported earnings: Investment in Lagoon Company Horizon Company Manda Company Jack Source Company Market Value P 40 per share P62 per share 99% of face amount P 112 per share Net Income (Loss) P 2,000,000 3,000,000.00 (1,500,000.00) 6,000,000.00 The following are the accounting policies of Bigfork Company: 1. 1. Investment properties are measured using cost model 2. A full year depreciation is taken in the year of acquisition and no depreciation is taken in the year of disposition. 3. The accounting policy is to report inventory at lower of cost and net realizable value applied to total inventory. Cost is determined under the first-in, first-out method. The entity used the direct write-off method of recording inventory write-down. Any inventory loss will be charged directly to cost of goods sold account. 4. In estimating allowance for doubtful accounts, the entity used percentage of accounts receivables. The policy is to maintain an allowance for doubtful accounts equal to 10% of the outstanding accounts receivable