PROBLEM: The adjusted accounts presented below were provided by the accountant of the Issa Hobby Shop for the year ended Dec. 31, 2003. Using the periodic inventory system, the merchandise inventory as of December 31 per physical count is P35,000.

Cash - 76,000

Marketable Securities - 12,800

Notes Receivable - 60,000

Accounts Receivable - 15,700

Interest Receivable - 600

Merchandise Inventory 1/1 - 45,000

Prepaid Insurance - 9,500

Office Supplies - 3,000

Store Supplies - 2,000

Land - 55,000

Building - 250,000

Accumulated Depreciation - Building - 37,500

Office Equipment - 35,000

Accumulated Depreciation - Office Equipment - 4,000

Store Equipment - 40,000

Accumulated Depreciation - Store Equipment - 3,500

Accounts Payable - 60,000

Salaries Payable - 15,000

Utilities Payable - 1,700

Notes Payable (due July 7, 2004) - 15,000

Notes Payable (due July 1, 2006) - 25,000

Interest Payable - 4,000

Mortgage Payable (due December 31, 2006) - 100,000

Issa Lara, Capital - 227,910

Issa Lara, Drawing - 7,000

Sales - 350,000

Sales Returns and Allowances - 4,500

Sales Discount - 5,000

Purchases - 150,800

Purchase Returns and Allowances - 7,540

Purchase Discounts - 3,250

Freight-in - 5,800

Depreciation Expense - Building - 18,000

Depreciation Expense - Office Equipment - 2,000

Depreciation Expense - Store Equipment - 2,500

Utilities Expense - 2,000

Advertising Expense - 9,000

Sales Salaries Expense - 15,800

Transportation-out - 3,700

Office Supplies Used - 1,500

Store Supplies Used - 1,200

Office Salaries Expense- 20,000

Insurance Expense - 8,000

Interest Income - 6,000

Rent Income (specialty shop) - 5,000

Interest Expense - 4,000

OTHER BITS OF INFORMATION INCLUDE:

Building Usage - 40% office and 60% store

Utilities Consumption - 30% office and 70% store

Insurance benefit - 20% office and 80% store

REQUIRED: Prepare a

a) Income Statement

b) Statement of Changes in Owner's Equity

c) Balance Sheet

SOLVE FOR THE INCOME STATEMENT AND STATEMENT OF CHANGES IN OWNER'S EQUITY FIRST. MAKE SURE THAT THE BALANCE SHEET'S TOTAL ASSETS IS EQUAL TO TOTAL LIABILITIES + OWNER's EQUITY.

Everything is in Philippine Peso.

ROBLEM 4 The adjusted accounts presented below were provided by the aceountant of the lssa Hobby Shop for the year ended Dec. 31, 2003. Using the periodic inventory system, the merchandise inventory as of December 31 per physical count is P35.000. vuer outs or intormation include: building usage, 40% office and 60% store; Utilities consumption, 30% office and 70% store; and Insurance benefit 20% office and 80% store