Problem 4: Cobra Corporation

Currant Assets

Cash P200,000 Inventory P 60,000 Fixed Assets

Equipment P500,000 Less: Acc. Depn (50,000) Total P710,000

Cobra Corporation Balance Sheet As of Jan 31, 1996

Liabilities

Accrued Wages Payable

Owners Equities Capital Stock R/E

Total

P90,000

P200,000 P420,000 P710,000

The following transactions occurred in the life of Cobra Corporation February 1996:

a. Merchandise worth Php 300,000 was purchased with an initial downpayment of Php

60,000. The rest is to be paid in 3 equal monthly installments.

b. Inventory worth Php 270,000 was sold at a marked-up price of 40%. 4/5 of these

were paid in cash.

c. Equipment depreciation for one year is estimated at P20,000.

d. Salaries of employees worth P115,000 was paid in cash. This includes the wages

earned over from last month.

e. Utility bills amounting to P10,000 were paid in cash.

f. The Cobra Corporation falls in the 30% bracket of taxable income. Taxes are paid on

the month of April each year.

__________________________________________________________________________________ 3 INMANAC : Problem Set

in the month of

Set up the Balance Sheet and Income Statement for Cobra Corporation as of Feb. 28, 1996.

Problem 5: XYZ Co.

Trace the effects (+ or - ) on the different balance sheet and income statement accounts of the following transactions. Prepare a balance sheet and income statement in proper form for the year 1997. Balance sheet as of Dec 31, 1996 is given below:

Assets

Cash P10,000 Accts. Receivables 5,000 Inventory 15,000 Land 50,000

Liabilities and Equities

XYZ Co. Balance Sheet As of Dec. 31, 1996

Equipment

Building

Acc. Depn

Total

Transactions during the year 1997 are as follows:

a. Office equipment was purchased on credit for P10,000.

b. Merchandise worth P15,000 was sold for P20,000 with customer paying in cash.

c. XYZ bought additional merchandise for P50,000 on credit.

d. The company paid P20,000 for salaries.

e. XYZ sold goods costing P50,000 for P 70,000, 50% paid in cash and 50% on credit.

f. XYZ collected P30,000 from its customers.

g. Depreciation for 1997 amounted to P 15,000.

h. Inventory at the end of 1997 amounted to P20,000 (all paid for in cash).

i. The company pay 30% of its net income as income tax.

j. Other expenses amounted to P10,000 paid for in cash.