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Income Statement Problem Solving

The document contains 3 examples of calculating income statements for different businesses. The first example calculates net income of Php 17,500 for Juan's Service Company using revenues of Php 20,000 and expenses of Php 2,500. The second example calculates net income of Php 1,175 for a sari-sari store using revenues of Php 4,650 and expenses of Php 3,475. The third example calculates cost of goods sold of Php 2,400 for a business using beginning inventory, purchases, freight in, purchase returns and ending inventory.

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Maryjoy Cuyos
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103 views12 pages

Income Statement Problem Solving

The document contains 3 examples of calculating income statements for different businesses. The first example calculates net income of Php 17,500 for Juan's Service Company using revenues of Php 20,000 and expenses of Php 2,500. The second example calculates net income of Php 1,175 for a sari-sari store using revenues of Php 4,650 and expenses of Php 3,475. The third example calculates cost of goods sold of Php 2,400 for a business using beginning inventory, purchases, freight in, purchase returns and ending inventory.

Uploaded by

Maryjoy Cuyos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Income

Statement
PROBLEM SOLVING
Single-Step
Income
Statement
Multi-Step
Income
Statement
Expanded Multi-Step
1. At the end of the first month of operations for
Juan’s Service Company, the business had the
following accounts:
Cash – Php19,000;
Prepaid Rent –Php500;
Equipment-Php5,000; and
Accounts Payable-Php2,000.
By the end of the month, Juan’s had earned
Php20,000 of Revenues; Php1,000 of Utilities
Expenses and Php1,500 of Salaries Expense; Calculate
the net income to be reported by the company for
this month.
1. At the end of the first month of operations for Revenue Php 20,000
Juan’s Service Company, the business had the
following accounts: Less Expenses:
Cash – Php19,000; Utilities Expense Php 1,000
Salaries Expense: 1,500 2,500
Prepaid Rent –Php500;
Equipment-Php5,000; and Net Income Php 17,500
Accounts Payable-Php2,000.
By the end of the month, Juan’s had earned
Php20,000 of Revenues; Php1,000 of Utilities
Expenses and Php of Salaries Expense; Calculate the
net income to be reported by the company for this
month.
2 During October, a sari-sari store had the
following transactions involving revenue
and expenses.
Paid Php1,200 for rent.
Provided services for Php2,750 in cash.
Paid Php250 for telephone service.
Provided services for Php1,900 on credit.
Paid salaries of Php1,675 to employees.
Paid Php350 for office cleaning service.

Did the firm earn a net income or incur a net loss for the
period? What was the amount?
Revenues:
2 During October, a sari-sari store had the Service Revenues Php2,750
following transactions involving revenue 1,900 Php 4,650
and expenses.
Less: Expenses
Paid Php1,200 for rent. Rent Expense 1,200
Utilities Expense 250
Provided services for Php2,750 in cash.
Salaries Expense 1,675
Paid Php250 for telephone service. Miscellaneous Expense 350 3,475

Provided services for Php1,900 on credit. Net Income Php 1,175


Paid salaries of Php1,675 to employees.
Paid Php350 for office cleaning service.

Did the firm earn a net income or incur a net loss for the
period? What was the amount?
3 Compute for the Cost of Good
Sold using the following:
Sales – Php5,000
Purchases-Php2,000
Purchase Returns-Php200
Freight in-Php100
Beginning Inventory –Php1,000
Ending Inventory – PhpPhp500
3 Compute for the Cost of Good Beginning Inventory
Purchases
Php 1,000
Php 2,000
Sold using the following: Freight In 100
Purchase Returns (200)
Sales – Php5,000 Net Purchases 1,900
Purchases-Php2,000 Goods Available for Sale 2,900
Less: Ending Inventory 500
Purchase Returns-Php200 Cost of Goods Sold Php 2,400
Freight in-Php100
Beginning Inventory –Php1,000
Ending Inventory – PhpPhp500
Gross Sale Php 80,000
-Contra Sales 7,500
Net Sales 72,500
Net Sales Php 72,500
Cost of Goods Sold 45,000
Beginning Inventory Php 18,000 Gross Profit Php 27,500
+Net Purchases 38,000
Cost of Goods Avail. for Sale 56,000
-Ending Inventory 11,000
Cost of Goods Sold 45,000

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