Sound Break Corporation Income and Retained Earnings Statement For the year Ended December 31, 2020 Net Sales P1,000,000 Cost of Goods Sold: Inventory, Dec. 31, 2019 P250,000 Purchases 720,000 Total Goods Available P970,000 Inventory 220,000 750,000 Gross Margin on Sales P 250,000 Selling and Administrative (including Depreciation of P20,000) 125,000 Net Income before Tax P 125,000 Provision for Income Tax 35,000
Sound Break Corporation
Income and
For the year Ended December 31, 2020
Net Sales P1,000,000
Cost of Goods Sold:
Inventory, Dec. 31, 2019 P250,000
Purchases 720,000
Total Goods Available P970,000
Inventory 220,000 750,000
Gross Margin on Sales P 250,000
Selling and Administrative (including
Net Income before Tax P 125,000
Provision for Income Tax 35,000
Net Income for the Year P 90,000
Retained Earnings, beginning 130,000
Total P 220,000
Dividends Paid 30,000
Retained Earnings, December 31, 2020 P 190,000
Sound Break Corporation
BALANCE SHEET
December 31, 2019 and 2020
ASSETS 2019 2020
Current Assets:
Cash P 75,000 P 85,000
Marketable Securities 25,000 25,000
Trade Receivables, net 185,000 245,000
Inventory, at cost 250,000 220,000
Prepaid Expenses 15,000 10,000
Total Current Assets P550,000 P585,000
Property and Other Assets:
Equipment, net P340,000 P320,000
Other Assets 15,000 15,000
Total Property and Other Assets P355,000 P335,000
Total Assets P905,000 P920,000
LIABILITIES AND
Current Liabilities:
Trade Payables P185,000 P165,000
Accrued Expenses 20,000 25,000
Other Current Liabilities 10,000 10,000
Total Current Liabilities P215,000 P200,000
Long-Term Liability
Mortgage Payable P120,000 P120,000
Stockholders’ Equity
Capital Stock, P100 par P300,000 P300,000
Additional Paid-In Capital 30,000 30,000
Retained Earnings Appropriated 80,000 80,000
Retained Earnings Unappropriated 160,000 190,000
Total Stockholders’ Equity P570,000 P600,000
Total Liabilities and Stockholders’ Equity P905,000 P920,000
Required:
Rate of
Cash flow from Operations to Total Liabilities
Ratio of Stockholders’ Equity to Total Liabilities
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