CFAS

Activities/Assessments:
You are the Accounting Manager of XYZ Company, Inc. The Chief Finance Officer
asked you to prepare a complete set of financial statements based on the information
provided below.
Chart of Accounts
Year 2019 Year 2018
Accrued expenses - Collection fees 18,000 35,000
Accrued expenses - Management and professional
fees 206,000 236,000
Accrued expenses - Occupancy costs 39,000 35,000
Accrued expenses - Others 97,000 96,000
Accrued expenses - Repairs and maintenance 297,000 235,000
Accrued expenses - Salaries, wages and employee
benefits 445,000 428,000
Accrued expenses - Utilities 98,000 135,000
Actuarial loss on pension liabilities, for the year -66,000 -75,000
Additional paid-in capital 4,590,000 4,518,000
Advances to contractors 87,000 78,000
Advances to contractors 718,000 617,000
Advertising 45,000 11,000
Allowance for doubtful accounts 608,000 612,000
Amortization of deferred credits 14,000 13,000
Appropriated Retained Earnings 35,495,000 32,444,000
Business meetings and representation 27,000 35,000
Capital Stock 2,465,000 2,465,000
Cash equivalents 6,177,000 6,408,000
Cash on hand and in banks 539,000 342,000
Collection fees 118,000 117,000
Collections of Subscription receivable during the
year 87,000 75,000
Common Stock Option Exercised 72,000 900
Common Stock Option Outstanding 0 51,800
Contractors payable 293,000 72,000
Contractual services 293,000 217,000
Cost of share-based payment 20,200 24,000
Current portion of Lease liabilities 36,000 0
Current portion of Long-term debt 9,923,000 4,971,000
Deferred Charges 1,491,000 2,420,000
Deferred tax assets 976,000 1,194,000
Deposits 72,000 76,000
Depreciation and amortization 2,405,000 2,177,000
Foreign exchange gains (losses) 601,000 -1,732,000
Gain on disposal of property and equipment – net 7,000 16,000
Guaranty deposits 5,000 5,000
Income tax Current 1,827,000 1,949,000
Income tax Deferred 218,000 -102,000
Income tax payable 203,000 451,000
Insurance 111,000 78,000
Interest expense -1,234,000 -1,257,000
Interest income 215,000 229,000
Interest payable 353,000 364,000
Inventories 205,000 76,000
Investments in associates 8,703,000 8,203,000
Management, technical and professional fees 307,000 497,000
Miscellaneous noncurrent assets 15,000 33,000
Non-Current portion of Lease liabilities 237,000 0
Non-Current portion of Long-term debt 26,417,000 28,735,000
Occupancy Costs 161,000 182,000
Other expenses 165,000 124,000
Other income (losses) 67,000 171,000
Other noncurrent liabilities 989,000 676,000
Other operating income - Consultation fee 128,000 202,000
Other operating income - Miscellaneous 2,000 1,000
Other operating income - Printing Fee 31,000 36,000
Other operating income - Rental of equipment 18,000 18,000
Other operating income - Sale of inventories 1,000 6,000
Other operating income - Technical services
agreement 196,000 164,000
Other Payables 61,000 32,000
Penalty expense 534,000 0
Pension liabilities 116,000 58,000
Power, light, and water 944,000 935,000
Prepaid expenses 395,000 385,000
Printing and communication 74,000 63,000
Property, plant, and equipment 81,925,000 73,360,000
Provisions (Liabilities) 1,080,000 570,000
Provisions Expense 639,000 0
Receivable from related parties 53,000 375,000
Receivables from Customers 1,476,000 1,474,000
Receivables from employees 24,000 24,000
Receivables from Interest from banks 14,000 23,000
Receivables from related parties 371,000 484,000
Receivables Others 92,000 107,000
Remeasurement loss on defined benefit plans -139,000 -74,000
Rental of equipment 55,000 9,000
Repairs and maintenance 562,000 422,000
Right-of-use assets 261,000 0
Salaries, wages, and employee benefits 1,652,000 1,628,000
Service Revenue 23,379,000 20,011,200
Subscription receivable -371,000 -458,000
Taxes and licenses 175,000 257,000
Trade payables 4,584,000 3,039,000
Transportation and travel 25,000 38,000
Unappropriated Retained Earnings 8,624,000 8,896,000
Additional information
a. Balances of selected accounts as of beginning of 2018 are as follows:
Additional paid-in capital 4,231,000
Appropriated Retained Earnings 28,698,000
Common Stock Option Outstanding 28,700
Remeasurement loss on defined benefit plans 1,000
Subscription receivable 235,0000
Unappropriated Retained Earnings 8,460,000
b.
c. 70% of the following accounts were directly related to the provision of services to
customers.
 Depreciation and amortization
 Power, light, and water
 Salaries, wages, and employee benefits
 Repairs and maintenance
 Contractual services
 Management, technical and professional fees
 Collection fees
 Occupancy Costs
 Printing and communication
 Transportation and travel
d. 1% of the above direct costs are other direct costs. All other operating costs
whether direct
or indirect were booked in Other Expenses account.
e. The Company declared dividends amounting to P2,243,000 and 2,151,000 in 2019
and 2018, respectively.
f. PPE consists of land, leasehold improvements, plan and technical equipment, office
furniture and equipment, and transportation equipment. Additions to PPE were as
follows: P10 million in 2019 and P8 million in 2018.
In the notes to financial statements, you have to supply the following:
 Company information based on a corporation you want to work or you are familiar
with provided it is consistent with the information above
 Summary of Significant Polices based on the chart of accounts and additional
information provided in the succeeding paragraphs
 Significant Accounting Judgments, Estimates and Assumptions
 Supporting computations and other information on account presented on the face
of the financial statements as required by PAS 1
Evaluation: Upon submission of the complete set of financial statements, you get 100
points. Your work will be evaluated based on the requirements of PAS 1. You will get
a demerit for every non-compliance with PAS 1.

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