The trial balance of ABC Company on December 31, 2019 shows the following information:

Requirements:

a. Prepare the statement of financial position of ABC Company as of December 31, 2019 by completing all the required information in the pro-forma statement of financial position, including a proper heading for the statement.

Hint: Discount on loans payable is a contra-account to loans payable.

b. Prepare a partial notes showing the breakdowns of the selected line items.

ABC started with a beginning capital of 180,000 on January 1, 2019. The following were the transactions during the year:

a. Mr. A, the sole proprietor of ABC Company made additional capital investments of 360,000 to the business.

b. Total income earned amounted to 1,000,000.

c. Total expenses incurred amounted to 560,000.

d. Mr. A made drawings of 140,000 from the business.

Requirement:

Prepare the statement of changes in equity using the pro-forma statement . Be sure to place a proper heading for the statement.

Debits Credits Cash on hand 60,000 Cash in bank 1,000,000 Accounts receivable 2,000,000 Allowance for doubtful accounts 300,000 Advances to employees 40,000 Advances to suppliers 30,000 Inventories 1,200,000 Prepaid insurance 800,000 Land 2,200,000 Building 3,400,000 Accumulated depreciation - Bldg. 2,000,000 Accounts payable 720,000 Accrued liabilities 80,000 Income tax payable 500,000 Loans payable (due in 20x3) 3,000,000 Discount on loan payable 870,000 Interest payable (due in 20x2) 340,000 Owner's Capital 4,660,000 Totals 11,600,000 11,600,000