Exercise 3-18.

Financial Statements Preparation

The following are the ledger balances of Winner Repair Service Center for the year ended
December 31, 2018.
Account Titles Amount
Accounts Payable P 8,000
Accounts Receivable 20,000
Accumulated Depreciation – Equipment 20,000
Accumulated Depreciation – Furniture
and Fixtures 5,000
Allowance for Bad Debts 2,000
Bad Debts Expense 1,000
Cash 18,000
Depreciation Expense 1,500
Equipment 70,000
Furniture and Fixture 40,000
Insurance Expense 1,000
Interest Income 2,000
Miscellaneous Expense 4,000
Notes Payable – due in 5 years 12,000
Notes Receivable 15,000
Office Supplies 6,800
Prepaid Insurance 2,500
R. Winner, Capital 92,050
R. Winner, Drawing 10,000
Rent Expense 10,000
Repairs and Maintenance Expense 5,000
Salaries Expense 20,000
Salaries Payable 4,250
Service Income 88,000
Supplies Expense 3,000
Utilities Expense 5,500

Required: Prepare the following in good form -

1. Income Statement
2. Statement of Changes in Owner’s Equity
3. Statement of Financial Position – Report Form
4. Notes to financial statements

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Format solution for Winner Repair Service Center

Notes to financial statements

Note 1: Trade and Other Receivables
Accounts Receivable P
Less: Allowance for bad debts P
 Notes Receivable
Total Trade and other receivables P

Note 2: Prepaid Expenses

Office Supplies P
Prepaid Insurance
Total Prepaid expenses P

Note 3: Property, Plant and

Equipment
Equipment P
Less: Accumulated depreciation P
Furniture and Fixture P
Less: Accumulated depreciation
Carrying Value P

Note 4: Trade and Other Payables

Accounts Payable P
Salaries payable
Total trade and other payables P

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Winner Repair Service Center

Income statement
For the year ended December 31, 2018

Revenues
Service Income P
Interest Income P

Expenses
Salaries expense P
Rent expense
Utilities expense
Repairs and maintenance
Supplies expense
Depreciation expense
 Insurance Expense
Bad debts expense
Miscellaneous expense

Net Income P

Winner Repair Service Center

Statement of Owner's Equity
For the year ended December 31, 2018

R.Winner Capital, January 1 P

Add: Net Income
Sub-total P
Less: R.Winner, Drawing
R.Winner Capital P

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Winner Repair Service Center

Statement of Financial Position
December 31, 2018

ASSETS
Current Assets
Cash P
Trade and other receivables ( Note 1 )
Prepaid Expenses ( Note 2 )
Total Current Assets P

Non-Current Assets
Property, Plant and Equipment ( Note 3)

Total Assets P

LIABILITIES AND OWNER'S EQUITY

Current Liabilities
Trade and other payables ( Note 4 ) P

Non-current Liabilities
 Notes Payable due in 5 years

Total Liabilities P

Owner's Equity
R.Winner, Capital
Total Liabilities and Owner's Equity P

Exercise 3-19. Computations of Financial Statements’ Components

The following information are taken from the records of M. Valenzuela Company:

Particulars Amount
Accounts Payable P 63,200
Accounts Receivable 74,100
Accrued Expenses 20,300
Accrued Income 5,000
Accumulated Depreciation-Equipment 20,000
Accumulated Depreciation-Furniture 10,000
Accumulated Depreciation-Office Building 60,000
Allowance for Bad Debts 42,000
Bonds Payable 1,500,000
Cash in Bank 280,000
Cash on Hand 35,000
Equipment 175,000
Furniture 96,000
Interest Payable 8,400
Interest Receivable 17,000
Land 1,500,000
Mortgage Payable 600,000
Notes Payable (due after 15 months) 45,000
Notes Payable (due after 6 months) 90,000
Notes Receivable 75,000
Office Building 1,820,000
Prepaid Insurance 15,000
Prepaid Rent 56,000
Prepaid Supplies 7,000
Unearned Income 36,000

Compute for: (a) total current assets; (b)total non-current assets; (c) total assets; (d) total current
liabilities; (e) total non-current liabilities; (f) total liabilities (g) owner’s equity of M. Valenzuela
Company. Present computation in good format on a 10-column worksheet.