Problem 5-1 (Serdeña)

Accounts Receivable/Notes Receivable/ Advances from customers

Beg. Balance - AR 200,000 End Balance - AR 180,000
Beg. Balance - NR 240,000 End Balance - NR 170,000

End Balance - Advances Beg Balance - Advances

from customers 40,000 from customers 55,000
Sales on Account 600,000 Sales Returns 4,000
Sales Discounts 2,000
Write-of 3,000
1,080,000 414,000

Collections including
recoveries (2,000) 668,000

Problem 5-2 (Marquez)

ALLOWANCE FOR DOUBTFUL ACCOUNTS

Ending Balance 80,000 Beginning Balance

50,000
Write Of 16,000 Bad Debts Expense
42,000 Recoveries
4,000
TOTAL 96,000
96,000

PROBLEM 5-3
ACCOUNTS PAYABLE/ NOTES PAYABLE/
(Orca) ADVANCES TO SUPPLIERS

AP- End 250,000 AP-Beg

200,000
400,000 NP-End
NP- End
68,000 ATS- Beg
210,000
551,000 Purchases
ATS- End
(GP)
50,000
PRA
6,000
PD 1,269,000
3,000
Problem 5-4 (Alegre)
Inventory, beg. P Add: Payment
400,000 800,000
Add: Net Purchases** Purchase R & A
860,000 6,000
Total Goods Avail. For sale1,260,000 Purchase Discount
3,000
Less: Inventory, end
(200,000) Less: AP, Beg.
(200,000)
Cost of Sales P
1,050,000 Purchase on Account
859,000
Add: Cash Purchases
10,000
Gross Purchases 869,000
Less: Purchase R & A
(6,000)
Purchase Discount
(3,000)
Net Purchases P
**Computation of Net Purchases: 860,000
AP, End P 250,000

Problem 5-5 (Banco)

Beg. Bal Rent Receivable 200,000 250,000 End Bal. Rent Receivable
End Bal. Unearned Rent 30,000 90,000 Beg. Bal. Unearned Rent
Income 770,000 660,000 Collections
Total 1,000,000 1,000,000

Unearned Rent Income

Problem 5-6 (Padua)
Prepaid Rent/ Rent Payable
 Prepaid asset beg. 20,000 250,000 Prepaid
asset end.
Accrued liab. end 65,000 80,000 Accrued
liab. beg
Payments 850,000 785,000 Expense

Total 1,115,000 = 1,115,000

Problem 5-7 (Deza)

Cost of Machine Acquired and Sold

1.) How much is the cost of the equipment disposed?

Carrying amount of equipment sold 25,000

Add: Accumulated depreciation 15,000
Cost of Equipment Disposed: 40,000

2.) How much is the cost of the asset acquired?

EQUIPMENT

Beginning Balance 100,000 Ending Balance

120,000
Cost of PPE Acquired 60,000 Cost of PPE Disposed 40,000
SQUEEZED
Total 160,000
160,000

ACCUMULATED DEPRECIATION

Ending Balance 18,000 Beginning Balance 15,000

Accumulated Depreciation 15,000 Depreciation Expense 18,000

Total 33,000 33,000

Problem 5-8 ( Astoveza)

1.) Prepaid Insurance, 12/31/15 7,500
Payments 41,500
 Prepaid Insurance, 12/31/16 (6,000)
Insurance Expense 43,000

2.) Interest Receivable, 12/31/16 3,700

Collections 123,500
Interest Receivable, 12/31/15 (14,500)
Interest Revenue 112,700

3.) Salaries Payable, 12/31/16 61,500

Payments 481,000
Salaries Payable, 12/31/15 (53,000)
Salaries Expense 489,500

4.) Sales 1,980,000

Accounts Receivable, 12/31/15 415,000
Accounts Receivable, 12/31/16 (550,000)
Collections 1,845,000

5.) Sales 1,980,000

Accounts Receivable, 12/31/15 415,000
Accounts Receivable, 12/31/16 (550,000)
Write-of (25,000)
Collections 1,820,000

6.) Sales 1,980,000

Accounts Receivable, 12/31/15 415,000
Accounts Receivable, 12/31/16 (550,000)
Write-of (25,000)
Recoveries 20,000
Collections 1,840,000
 Problem 5-9 (QUIA)

Accounts Receivable/ Notes Receivable

Accounts Receivable, decrease 100,000 100,000 Notes Receivable, increase
Sales on Account/Gross Sales 4,260,000 10,000 Accounts Receivable written off
4,200,00
0 Cash received from customers
30,000 Sales Discounts
20,000 Sales returns and allowances
4,360,00
4,360,000
0

1. Gross Purchases

Accounts Payable
Cash paid to creditors 2,800,000 200,000 Accounts Payable, decrease
2,650,00
40,000
Purchase Discounts 0 Purchases
Purchase Returns 10,000
2,850,00
2,850,000
0
2. Cost of Sales

Gross Purchases 2,650,000

Add: Freight In -
Less: Purchase Discounts 40,000
Purchase Returns 10,000
Net Purchases 2,600,000
Merchandise Inventory
2,625,00
25,000
Merchandise Inventory, decrease 0 Cost of Sales
Net Purchases 2,600,000
2,625,00
2,625,000
0

3. Rental Revenue

Rental Revenue / Unearned Rental Income

Rental Revenue 454,000 14,000 Rental Receivables, increase
40,000 Unearned Rental Income, decrease
400,000 Cash received from tenants
454,000 454,000
 4. Interest Expense

Prepaid Interest
Prepaid Interest, decrease 5,500 114,000 Interest Expense
Interest Payable, increase 8,500
Interest Paid 100,000
114,000 114,000

PROBLEM 5-10
(Mendoza)
Q
1 A/R, N/R
A/R Beg. 200 250 A/R End.
N/R Beg. 300 100 N/R End.
Sales (Accrual 1,0 1,12
Basis) 00 0 Sales (Cash Basis)
20 SRA
10 SD
1,50 1,50
0 0
Q
2 A/P, N/P
A/P End. 25 50 A/P Beg.
N/P End. 75 100 N/P Beg.
Purchases (Accrual
Purchases (Cash Basis) 650 650 Basis)
PRA 40
PD 10
800 800
Purchases (Accrual
Basis) 650
PRA 40
PD 10
Net Purchases 600
Q
3 MI
MI Beg. 200 100 MI End.
NP 600 700 COGS
800 800
1,00
Gross Sales 0
 SRA 20
SD 10
Net Sales 970
COGS 700
Gross Income /
Gross Profit 270
Q
4 Prepaid Salaries, Accrued Salaries Payable
PS Beg. 100 125 PS End.
ASP End. 50 75 ASP Beg.
Payment of Salaries 350 300 Salaries Expense
500 500
Q
5 Rent Receivable, Unearned Rent Income
RR Beg. 70 40 RR End.
URI End. 40 80 URI Beg.
Rent Income 490 480 Collection of Rent
600 600

Problem 5-11 (Reyes)

1. B

ACCOUNTS RECEIVABLE
Beg. Balance Balance End
200,000 300,000
Recoveries Sales Discount
8,000 20,000
Sales Collections
1,570,000 1,408,000
Accounts Written-off
50,000
Total
1,778,000 1,778,000

Sales 1,570,000
Less: Sales Discount 20,000 2. B
Net Sales 1,550,000
ACCOUNTS PAYABLE TRADE
Payment Beg. Balance
1,210,000 150,000
Purchase returns Purchase
 10,000 1,170,000
Balance end
100,000

Total
1,320,000 1,320,000
Purchases 1,170,000
Less: Purchase returns 10,000
Net Purchases 1,160,000

3. B
MERCHANDISE INVENTORY
Beg. Balance Balance End
380,000 330,000
Net Purchase Cost of Sale
1,160,000 1,210,000

Total
1,540,000 1,540,000

4. A
RENT RECEIVABLE
Beg. Balance Balance End
70,000 80,000
Rent Income Collections
130,000 120,000

Total 200,000
200,000

5. A
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Accounts written-off Beg. Balance
50,000 20,000
Balance end Doubtful Account expense
30,000 52,000
Recoveries
 8,000

Total
80,000 80,000

5 -12 (Duarte)
1. The professional fees
Accounts Receivable Trade
Balance, 12/1/17 500,000 750,000 Balance, 12/1/18
Fees 5,250,000 5,000,000 Collections
5,750,000 5,750,000
2. Net Income
Professional Fee 5,250,000
Expenses:
Rent 1,300,000
Supplies 850,000
Other Operating Expense 750,000
Interest 90,000
250,000 3,240,000
2,010,000

3. Current Asset
Cash 1,500,000
Accounts Receivable 750,000
Office Supplies 250,000
Total Current Asset 2,500,000
4. Noncurrent Asset
Furnitures and Fixtures 2,500,000
Less: Accumulated Depreciation 375,000
Total Noncurrent Asset 2,125,000
5. Total Asset
Current Asset 2,500,000
Noncurrent Asset 2,125,000
Total Asset 4,625,000
6. Current Liabilities
Notes Payable 1,000,000
Accrued Rent 100,000
Accrued Interest 90,000
Total Current Liabilities 1,190,000
7. Total Owners Equity
A = L + OE
4,625,000 - 1,190,000 = 3,435,000
Asset 4,625,000
Less: Liabilities 1,190,000
Total Owner's Equity 3,435,000
5 -12
1. The professional fees
Accounts Receivable Trade

Balance, 12/1/17 500,000 750,000 Balance, 12/1/18

Fees 5,250,000 5,000,000 Collections

5,750,000 5,750,000
2. Net Income

Professional Fee 5,250,000

Expenses:

Rent 1,300,000

Supplie
s 850,000

Other Operating Expense 750,000

Interest 90,000

250,000 3,240,000

2,010,000
3. Current
Asset

Cash 1,500,000

Accounts Receivable 750,000

Office Supplies 250,000

Total Current Asset 2,500,000

4. Noncurrent Asset

Furnitures and Fixtures 2,500,000

Less: Accumulated Depreciation 375,000

Total Noncurrent Asset 2,125,000

5. Total Asset

Current Asset 2,500,000

Noncurrent Asset 2,125,000

Total Asset 4,625,000

6. Current Liabilities

Notes Payable 1,000,000

Accrued Rent 100,000

Accrued Interest 90,000

Total Current Liabilities 1,190,000

7. Total Owners Equity
A = L + OE

4,625,000 - 1,190,000 = 3,435,000

Asset 4,625,000

Less: Liabilities 1,190,000

Total Owner's Equity 3,435,000

Problem 5-13 (Abines)
1. Beg. Balance 124,000
Sales on account 1,535,000
Sales discount (13,000)
Collections (1,500,000)
Ending bal. (146,000)
Total 1,659,000

Salesonaccount 1,535,000
Add:Cashsales 160,000
Total sales 1,695,000
2.
Grosss ales (see No. 1) 1,695,000
Less:Sales discount 13,000
Net sales 1,682,000

3.
Beg Bal. 382,000
Purchases 1,234,000
Total 1,616,000
Less: Payment 1,206,000
End, Balance 410,000
Purchases on Account 1,234,000
Add: Cash Purchases 120,000
Total 1,354,000
Answer #3: 1,354,000

4.
Beginning Bal. 186,000
Purchases 1,354,000
Total 1,540,000
End Bal . 190,000
COS 1,350,000
5.

Beg bal. Prepaid Interst 9,600

End bal. Accrued interest 9,000

Payments 204,000

Total 222,600

Less: end bal, prepaid interest 8,400

Less: beg bal. Accrued interest 7000

Expenses 207,2004

6.
Generel and administrative expenses 207,200
Dep expense 84,000
Warranty expenses 6,400
Total OPEX 297,600

#7
Selling price(land) 20,000
Less: book value 16,000

Gain on sale of land 4,000

#8 Selling price 12,000

Less:book value (Cost 25,000-16,000) = 9,000
Gain on sale of warehouse equipment 3,000

#9 Selling price 42,000

Less: book value (cost 48,000-20,000) = 28,000
Gain on sale of boiler 14,000

#10 Net sales 1,682,000

Less: COS 1,350,000 Gross Profit 332,000
Less: opex 297,000 Gain on sale (14k + 4k + 3k) =21,000
Net Income 55,400

Problem 5-14 (Gane)

Problem 5-15 (Bangga)
Question No. 1

Cash Receipts:
From customers 360,000
From issue of ordinary shares 100,000
tFrom bank loan 100,000 560,000
Cash disbursements:
Purchase of inventory 300,000
Rent 15,000
Salaries 30,000
Utilities 5,000
Insurance 3,000
Purchase of equipment and furniture 40,000 393,000
Cash 167,000
Question Nos. 2 and 3
Current assets
Cash 167,000
Inventories 100,000
Prepaid rent (1,000 x 3) 3,000
Total current assets (No. 2) 270,000
Noncurrent assets
Property, plant and equipment 40,000
Less accumulated depreciation 4,000 36,000
Total assets (No. 3) 306,000
Question No. 4
Accounts payable 20,000
Utilities payable 1,000
Loans payable 100,000
Interest on loans payable (100,000 x 12% x 9/12) 9,000
Total current liabilities 130,000
Question No. 5
Ordinary shares 100,000
Retained earnings (net income) 76,000
Shareholders’ equity 176,000
Problem 5-16 (Bonabon)

Notes Receivable – 1/1 P Notes Receivable – 12/31 P

200,000 210,000
Accounts Receivable – 1/1 Accounts Receivable – 12/31
740,000 950,000
Sales on account Collection 2,
3,370,000 950,000
Notes Receivable discounted
200,000
Total P P
4,310,000 4,310,000
1.A

Accounts Receivable / Notes Receivable

2. A
Accounts Payable / Notes Payable
Notes Payable – 12/31 P Notes Payable – 1/1 P
280,000* 750,000
Accounts Payable – 12/31 750,000 Accounts Payable – 1/1
600,000
Payment 2,100,000 Purchases
1,780,000
Total P 3,130,000 P
3,130,000
*Notes payable – 12/31 580,000
Note Payable – bank 300,000
280,000
3.C

Equipment
Equipment – 1/1 P Equipment – 12/31 P
1,000,000 1,200,000
Acquisition Cost Depreciation
280,000 80,000
Total P P
1,280,000 1,280,000

4. C
Interest accrue on note issued to bank (300,000 *12% * 10/12) 30,000
Interest Expense 30,000

5. D
Retained earnings – 12/31 P Retained earnings – 1/1 P
600,000 500,000
Dividends declared Net income
400,000 500,000
Total P P
1,000,000 1,000,000
Retained Earnings

Problem 6-1 (Delos Reyes)

2016 2017
RE, end RE, end
Net Workin of the Net Workin of the
income g capital year income g capital year
Unadjusted
balances 200,000 180,000 200,000 160,000 260,000 360,000
1 - - - - - -
2 - - - - - -
Adjusted
balances 200,000 180,000 200,000 160,000 260,000 360,000

Questions No. 7
Assuming errors were discovered in 2016
ADJUSTING ENTRIES Debit Credit
Miscellaneousi1) ncome 25,000
Rent income 25,000

2)Notespayable 28,000
Accountspayable 28,000

Assuming errors were discovered in 2017

ADJUSTING ENTRIES Debit Credit

1) Noentry
2) Noentry

Assuming errors were discovered in 2018

ADJUSTING ENTRIES Debit Credit

1) Noentry
2) Noentry

SUMMARY OFANSWERS:
1. A 2. B 3. A 4. C 5. C 6. C
Problem 6-2 (Purugganan)

2017 AJE DEBIT CREDIT 2018 AJE DEBIT CREDIT

Interest Expense 15,000 Retained 15,000
Earnings
Interest 15,000 Interest 15,000
Payable Expense

Interest 20,000 Interest Income 20,000

Receivable
Interest 20,000 Retained 20,000
Income Earnings

Prepaid 6,000 Insurance 6,000

Insurance Expense
Insurance 6,000 Retained 6,000
Expense Earnings

Rent Revenue 7,500 Retained 7,500

Earnings
Unearned 7,500 Rent 7,500
Rent Revenue Revenue

PROBLEM 6-3 (Dela Cruz)

NET INCOME RETAINED WORKING CAPITAL

EARNINGS
2017 2018 2017 2018 2017 2018
200,000 160,000 200,000 360,000 180,000 260,000
1. Understated (60,000) 60,000 (60,000) (60,000)
2. Understated 80,000 (80,000) 80,000 80,000
3. Overstated (20,000) 20,000 (20,000) (20,000)
TOTAL 200,000 160,000 200,000 360,000 180,000 260,000
Solution:

QUESTION
1. A
2. B
3. A
4. C
5. C
6. C

7. AJE
2017
Purchases 60,000
Accounts Payable 60,000

Accounts Receivable 80,000

Sale 80,000

Cost of Sale 20,000

Inventory 20,000

Problem 6-4 (Cabalquinto)

1.

2017
Insurance
expense 30,000
Prepaid
insurance 30,000
2018
Retained
earnings 30,000
Insurance
expense 6,000
Prepaid
insurance 36,000
2019
Retained 36,000
earnings
Prepaid
Insurance 36,000

2.

2017
Unearned
income 20,000
Rent income 20,000
2018
Unearned
income 30,000
Retained
earnings 20,000
Rent income 10,000
2019
Unearned
income 30,000
Retained
earnings 30,000

3.

2017
Accumulated
Depreciation 12,000
Depreciation
expense 12,000
2018
Accumulated
Depreciation 12,000
Retained Earnings 12,000
2019
Accumulated
Depreciation 12,000
Retained Earnings 12,000

4.
2017
Building improvements 200,000
Repairs expense 200,000
Depreciation expense 50,000
Accumulated
Depreciation 50,000

2018
Building improvements 200,000
Retained earnings 200,000
Depreciation expense 50,000
Retained earnings 50,000
Accumulated
depreciation 100,000
2019
Building improvements 200,000
Retained earnings 200,000
Depreciation expense 50,000
Retained earnings 100,000
Accumulated
depreciation 150,000

5.

2017
Other income 20,000
Accumulated
depreciation 48,000
Gain on sale 8,000
Building 60,000
2018
Retained Earning 12,000
Accumulated
depreciation 48,000
Building 60,000
2019
Retained Earning 12,000
Accumulated
depreciation 48,000
Building 60,000
6.

2017
Repair expense 20,000
Building 20,000

Accumulated
Depreciation 5,000
Depreciation
expense 5,000
2018
Retained Earning 20,000
Building 20,000

Accumulated
depreciation 10,000
Retained earnings 5,000
Depreciation
expense 5,000
2019
Retained Earning 20,000
Building 20,000

Accumulated
depreciation 10,000
Retained earnings 10,000

2017
Net
incom Working Retained
e capital earnings, end
200,0
Unadjusted bal 00 180,000 200,000
(30,00
1 0) (30,000) (30,000)
20,00
2 0 20,000 20,000
12,00
3 0 12,000
150,0
4 00 150,000
(12,00
5 0) (12,000)
(15,00
6 0) (15,000)
 325,0
Adjusted bal 00 170,000 325,000

2018
Net income Working capital Retained earnings, end
Unadjusted bal 160,000 260,000 360,000
1 (6,000) (36,000) (36,000)
2 10,000 30,000 30,000
3 12,000
4 (50,000) 100,000
5 (12,000)
6 5,000 (10,000)
Adjusted bal 119,000 254,000 444,000

problem 6-5 (Villalon)

Working
Net Income Capital
2017 2018 2018
Merchandise Inv.

overstated 10,000 (10,000)

understated (8,000) (8,000)

Adv. to supplier recorded as purchase

(20,000) 20,000

(40,000) (40,000)

Adv. from customers recorded as sales

20,000 (20,000)

70,000 70,000

Improvements charged to expense life

of 5yrs. (80,000) 20,000

Sold equipment 20,000

Loss on sale (25,000-20,000) 5,000

(45,000) 32,000 22,000

 Net Income 2017 (understated) (45,000)

Net Income 2018 (overstated) 32,000

Understated Retained Earnings (13,000)

Purchases 20,000

Retained earnings 20,000

Advances to Supplier 40,000

Purchases 40,000

Problem 6-6 (Sta Ana)

2017 2018 12/31/2018
Retained
Working Working Earnings
Net Income Net Income
Capital Capital
Ending Inventory ₱ ₱ ₱
2017 (6,000.00) (6,000.00) 6,000.00
Ending Inventory ₱ ₱ ₱
2018 10,000.00 10,000.00 10,000.00
Depreciation ₱ ₱
Expense 2017 (11,000.00) (11,000.00)
Depreciation ₱ ₱
Expense 2018 (7,000.00) (7,000.00)
Accrued Expense ₱ ₱ ₱
2017 4,500.00 4,500.00 (4,500.00)
Accrued Expense ₱ ₱ ₱
2018 7,500.00 7,500.00 7,500.00
Prepaid Expense ₱ ₱ ₱
2017 (5,000.00) (5,000.00) 5,000.00
Prepaid Expense ₱ ₱ ₱
2018 (12,000.00) (12,000.00) (12,000.00)
Accrued ₱ ₱ ₱
Revenues 2018 (3,000.00) (3,000.00) (3,000.00)
Deferred ₱ ₱ ₱
Revenues 2017 1,200.00 1,200.00 (1,200.00)
₱
₱ ₱ ₱ (15,500.00
Total ₱ (16,300.00) (5,300.00) 800.00 2,500.00 )

PROBLEM 6-7 (Anon)

A. Insurance expense (35,000 / 5 years) 7,000
Prepaid insurance (35,000 / 5 x 2) 14,000
Retained earnings 21,000

B. Retained earnings 25,000

Inventory 25,000

C. Retained earnings 15,500

Commission expense 15,500

D. Bad debt expense 30,000

Allowance for bad debts 30,000
(4,000,000 x .75%)

*no adjusting entry is necessary

E. Equipment 100,000
Accumulated Depreciation 30,000
Retained Earnings 70,000

1. b. Credit to retained earnings- P21,000

Insurance expense (35,000 / 5 years) 7,000

Prepaid insurance (35,000 / 5 x 2) 14,000
Retained earnings 21,000

2. b. Debit to retained earnings- P25,000

Retained earnings 25,000

Inventory 25,000

3. a. Debit to retained earnings- P15,500

Retained earnings 15,500

Commission expense 15,500
 4. d. No adjusting entry is needed

Bad debt expense 30,000

Allowance for bad debts 30,000
(4,000,000 x .75%)

*no adjusting entry is necessary

5. c. Increase by P50,500

21,000
70,000
(25,000)
(15,500)
50,500

PROBLEM 6-8 (Meana)

Question No. 1
Unadjusted beginning balance (Cr) 70,000
Add: Share premium credited to RE 40,000
Unadjusted RE (Dr) 143,200
Unadjusted Net loss (C) 253,200

Question No. 2
Unadjusted net loss (253,200
Sales over, NI over (20,000 x 140%) (28,000))
EI under, NI over 20,000
Gain under, NI under 1,000
Repairs expense over, NI
under 20,000
Depreciation Expense building under,
NI over
(5% x 500,000) (25,000)
Depreciation Expense eqpmt under, NI
over (20,100)
Bad debts exp under, NI
over (2,600)
(287,900
Adjusted net loss (C) )
Computation of gain
Net Selling Price 9,000
Less: Carrying amount (10,000-(10,000 x 10% x 8,000
2)
Gain on sale 1,000
Computation of depreciation expense
equipment:
Beg. Balance of the eqpmt. Net of asset
disposed x 19,10
(201,000-10,000) 191,000 10% 0
Asset disposed 10,000 x 10% x 6/12 500
Asset acquired 20,000 x 10% x 3/12 500
20,10
Depreciation expense 0
The unadjusted beg. Balance of the equipment is computed as
follows:
192,00
Unadjusted balance end 0
Add: Amount credited for asset
disposed 9,000
201,00
Unadjusted balance beg 0
The adjusted balance end of the
equipment is 201,00
Unadjusted balance beg 0
Add: Asset acquired 20,000
221,00
Total 0
Less: cost of asset
disposed 10,000
211,00
Adjusted balance end 0
Computation of bad debts
Required allowance (240,000-28,000) x
5% 10,600
Less: Allowance for BD unadjusted 8,000
Additional bad debts exp. 2,600

Question No. 3
ASSETS
Cash 35,000
Accounts Receivable (240,000-
28,000) 212,000
Less: Allowance for Bad
Debts 10,600 201,400
Advances to employees 4,800
Interest Receivable 3,000
Prepaid expenses 16,200
Merchandise inventory (180,000
+20,000) 200,000
Land 200,000
Building 500,000
Less: Accumulated
Depreciation
(150,000+25,000) 175,000 325,000
Equipment 211,000
Less: Accumulated
Depreciation
(59,200+20,100-2,000) 77,300 133,700
Utility deposits 15,000
Other Assets 6,000
Total assets (D) 1,140,100

Question No. 4
and 5
LIABILITIES AND CAPITAL
Accounts payable 260,000
Advances from customer 10,000
Interest payable 18,000
Accrued expense 30,000
Mortgage Payable, current portion 100,000

Total current (A) 418,000

MP, noncurrent
portion 500,000
Total liabilities 918,000
Ordinary shares 400,000
Share Premium 40,000
Retained earnings (deficit)
Beg. Balance 70,000
Less: Adjusted net (A)222,10
loss (287,900) (217,900) 0
Total liabilities and SHE 1,140,100