1. Solve the following problem:

1. Given the data below, reconstruct the balance sheet and the income statement of Aissa Pearls for the year 2017:

Aissa Pearls

Balance Sheet

December 31, 2017

ASSETS

Current Assets:
	Cash	?
	Marketable Securities	50,000
	Accounts Receivable, net	?
	Inventories	?	?
Property & Equipment:
	Plant & Equipment, net		?
TOTAL ASSETS			?

LIABILITIES & STOCKHOLDERS EQUITY

Current Liabilities		?
Long Term Liabilities:
	Bonds Payable, 12.5%	?
TOTAL LIABILITIES			?
Stockholders Equity:
	Ordinary Share	500,000
	Retained Earnings	300,000	800,000
TOTAL LIABILITIES & STOCKHOLDERS EQUITY			?

Aissa Pearls

Income Statement

For the year ended December 31, 2017

Net Sales	?
Cost of Goods Sold	?
Gross Margin on Sales		525,000
Operating Expenses		?
Operating Income		?
Other Expense: Interest Expense		?
Net Income before Taxes		?
Income Tax (35% Tax Rate)		?
NET INCOME		?

Additional Data:

1. Operating expenses were 15% of net sales.
2. Acid test ratio was 1.3:1.
3. Times interest earned was 6 times.
4. Gross margin was 35% of net sales.
5. The age of receivables was 36 days.
6. The beginning accounts receivable was Php 160,000. Use 360 day year.
7. Inventory turnover was 4 times. The beginning inventory amounted to Php 250,000.
8. Total debt to stockholders equity was 0.08:1.

Required: Compute the following requirements using the given formula:

1. Net Sales =(Gross margin/gross margin ratio)
2. Cost of sales= (Net Sales x Cost of Sales ratio)
3. Operating Expenses= (Net Sales x % to Net Sales)
4. Operating Income = (Net Sales Cost of Sales Operating Expenses)
5. Interest Expense = (Operating Income/Times Interest Earned
6. Bond Payable = (Interest Expense/Interest Rate)
7. Receivable Turnover =(360 days/Age in Receivables)
8. Average Receivables = (Net Credit Sales/Receivable Turnover)
9. Ending Accounts Receivable = (Average Receivables x 2)
10. Average Inventory = (Cost of Goods Sold / Inventory Turnover)
11. Ending Inventory = (Average Inventory x 2)
12. Total Debt = (Ratio of Total Debt & Stockholders Equity)
13. Current Liabilities = (Total Debt - Bonds Payable)
14. Quick Assets = (Acid Test ratio x Current Liabilities)
15. Cash = (Quick Assets Marketable Securities Accounts Receivable)