PROBLEM $1$

The data shown below were obtained from the financial records of the New Trends Corporation for the ycar ended December $31,2008.$

New Trends Corporation

INCOME AND RETAINED EARNINGS STATEMENT

For the year ended December $31,2008$

Net Sales

Cost of Goods Sold:

Inventory. Dec. $31,2007$

Purchases

$P250,000$

$,720,000$

$P970,000$

Total Goods Available

Inventory, Dec. $31,2008$

$220,000$

Gross Margin on Sales

Selling and Administrative $($including

Depreciation of P$20,000)$

Net Income Before Tax

Provision for Income Tax

Net Income for the Year

Retained Earnings. Beginning

Total

Dividends Paid

Retained Earnings. Dec. $31,2008$

P$1,000,000$

New Trends Corporation BALANCE SHEETS

December $31,2007$ and $2008$

Current Assets:

Cash

Marketable Securities

Trade Receivables, net

Inventory, at cost

Prepaid Expenses

Total Current Assets

Property and Other Assets:

Equipment, net

Other Assets

Total Property and Other Assets

Total Assets

A S SETS

$92$