The income statement summarizes the revenues and expenses of Jaime Santos Law Firm for the month of December 2016. It shows the firm generated P260,000 in total revenues from legal services and interest. Operating expenses for the month were P60,000, resulting in net income of P190,000.
The statement of financial position presents the assets, liabilities, and owner's equity of Jaime Santos Law Firm as of December 31, 2016. It lists current assets of P486,800 including cash of P385,000, as well as non-current assets of P1,270,000 including property and equipment. Total assets were P1,756,800. Liabilities included current liabilities of P
3. It shows a summary of the revenues and
expenses of an entity or a specific period of
time, such as a month or a year.
It is so called the STATEMENT OF EARNINGS
or STATEMENT OF OPERATIONS.
It holds perhaps the most important single
piece of information about business- its net
income, revenue minus expenses.
5. Jaime Santos Law Firm
Income Statement
For the month ended December 31, 2016
_______________________________________________________________________
Service Revenue P250,000
Interest Income 10,000
_______________
Total P260,000________________
Operating Expenses
Utilities Expense P6,000
Office Expense 4,000
Salary Expense 20,000
Transportation Expense 9,000
Depreciation Expense-
Condominium Unit 10,000
Depreciation Expense-
Computer Equipment 20,000_______________
Total Operating Expenses P60,000________________
Net Income P190,800
6. Heading:
-Name of the entity
-Title of the statement
-Accounting period
unit of measure
Body:
-Cash and promises received from service
-Cost to operate the service
7.
8. Reports the financial position (economic
resources and sources of financing) of an
accounting entity at the point of time.
10. LONG- TERM ASSETS CURRENT ASSETS
Are all assets other than
current assets.
They are used to
operate business and
are not held for sale.
Are assets that are
expected to be
converted to cash, sold,
or consumed during the
next 12 months or
within the business
normal operating cycle
if longer than a year.
12. LONG-TERM LIABILITIES CURRENT LIABILITIES
Are not current or those
that are not due or
payable within one year
or within the entity’s
operating cycle.
Are due to be paid
within one year or
within the entity’s
operating cycle if the
cycle is longer than a
year.
13. LONG- TERM LIABILITIES CURRENT LIABILITIES
Long-term loans
Deferred income taxes
Bonds payable
Accounts payable
Notes payable (due
within one year)
Wages payable
14. The proportion of the total value of assets of
the company which can be claimed by the
owners.
The amount which is invested by the owner in
the business less the money which is taken out
by the owner of a business.
OWNERS EQUITY= ASSETS- LIABILITIES
15. Jaime Santos Law Firm
Statement of Financial Position
December 31, 2016
_____________________________________________________________________________________________________________________________________________________________________________
_________________________
Assets
Current Assets
Cash P385,000
Accounts receivable 90,000
Interest receivable 10,000
Office supplies 1,000
________
Total current assets P486,800_________
Property and equipment
Condominium Unit P1,200,000
Less: Accumulated Depreciation 20,000
________
P1,180,000_________
Computer Equipment P100,000
Less: Accumulated Depreciation 10,000
________
90,000________
Total 1,270,000
________
Total assets 1,756,800________________
Liabilities
Current Liabilities
Accounts Payable P1,000
Accounts Salaries Payable P 5,000
________
Total Current Liabilities 6,000
Non-Current Liabilities
Note Payable 1,000,000
_________
Total Liabilities 1,006,000
Owner’s Equity
Jaime Santos, Capital 750,800
________
Total Liabilities and Owner’ Equity P1,756,800
