(1) Truman Unlimited (Truman), distributor of heavy equipment and machinery, was organized on April 1, 1992....

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(1) Truman Unlimited (Truman), distributor of heavy equipment and machinery, was organized on April 1, 1992. After one year of operations, the balance sheet for Truman is shown below: Current Assets: Cash Inventory Total Fixed Assets: Office Equipment Less: Acc'd Dep'n. Net Office Eqpt. TRUMAN UNLIMITED Balance Sheet As of 1 April 1993 P 600,000 300,000 P 900,000 P 250,000 5,000 P 245,000 Current Liabilities: Notes Payable Bank Loans Payable Total Owners' Equity: Paid-In Capital Retained Earnings Total Owners' Equity TOTAL ASSETS P1,145,000 *Monthly depreciation charges of P416.67 a month. TOTAL LIAB. & OE P 5,000 200,000 P 205,000 P 945,000 (5,000) P 940,000 P1,145,000 Transactions for April and May 1993 are listed below: (a) Makes a cash disbursement for the rental of their new stockroom and office. Monthly rental is at P15,000 per month. Truman pays six months in advance. (b) Purchased imported heavy equipment and generators (all intended for sale). The list price on the imports were P25,000 but Truman was able to negotiate for a discount of 2,000. In ` addition on this, Truman paid P3,000 in taxes to have the imported goods cleared at customs. Of the total amount of the goods that were entered in the accounting records, 50% were paid for in cash, and the rest were on credit. (c) Goods worth P270,000 were removed from inventory, delivered to customers, and were sold for P600,000. Of this amount, 75% were on credit while the rest were on cash basis. It was estimated that 10% of those sales on credit would never be collected. (d) Issues a check for P13,000 to pay off part of the principal of the Bank Loan obtained. (e) A customer pays Truman P500 for a machine part worth P200. The customer requests that the part be delivered after 100 days. (f) Cash Disbursements: Utilities, P30,000; Salaries, P5,000; Interest, P9,000, (g) (The Company) Takes P135,000 from the business to give as donation to a home for street children. (h) Income tax rates are as follows: 35% for the first 25,000; 45% for any amount above 25,000. Assume that Truman pays all taxes on January 1994. Required: (1) Journalize all relevant transactions. (2) Prepare the income statement for the two months and the balance sheet as of May, 1993, in proper format. (1) Truman Unlimited (Truman), distributor of heavy equipment and machinery, was organized on April 1, 1992. After one year of operations, the balance sheet for Truman is shown below: Current Assets: Cash Inventory Total Fixed Assets: Office Equipment Less: Acc'd Dep'n. Net Office Eqpt. TRUMAN UNLIMITED Balance Sheet As of 1 April 1993 P 600,000 300,000 P 900,000 P 250,000 5,000 P 245,000 Current Liabilities: Notes Payable Bank Loans Payable Total Owners' Equity: Paid-In Capital Retained Earnings Total Owners' Equity TOTAL ASSETS P1,145,000 *Monthly depreciation charges of P416.67 a month. TOTAL LIAB. & OE P 5,000 200,000 P 205,000 P 945,000 (5,000) P 940,000 P1,145,000 Transactions for April and May 1993 are listed below: (a) Makes a cash disbursement for the rental of their new stockroom and office. Monthly rental is at P15,000 per month. Truman pays six months in advance. (b) Purchased imported heavy equipment and generators (all intended for sale). The list price on the imports were P25,000 but Truman was able to negotiate for a discount of 2,000. In ` addition on this, Truman paid P3,000 in taxes to have the imported goods cleared at customs. Of the total amount of the goods that were entered in the accounting records, 50% were paid for in cash, and the rest were on credit. (c) Goods worth P270,000 were removed from inventory, delivered to customers, and were sold for P600,000. Of this amount, 75% were on credit while the rest were on cash basis. It was estimated that 10% of those sales on credit would never be collected. (d) Issues a check for P13,000 to pay off part of the principal of the Bank Loan obtained. (e) A customer pays Truman P500 for a machine part worth P200. The customer requests that the part be delivered after 100 days. (f) Cash Disbursements: Utilities, P30,000; Salaries, P5,000; Interest, P9,000, (g) (The Company) Takes P135,000 from the business to give as donation to a home for street children. (h) Income tax rates are as follows: 35% for the first 25,000; 45% for any amount above 25,000. Assume that Truman pays all taxes on January 1994. Required: (1) Journalize all relevant transactions. (2) Prepare the income statement for the two months and the balance sheet as of May, 1993, in proper format.

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