Notes to Financial Statements

Note 1. Cash
Cash in Bank balance includes P 100, an amount restricted as to withdrawal
as it as it represents their share capital in order to maintain their account in
XUCCO open.
Note 2 Inventories
Inventories are computed by dividing the total production cost by cost
produced and the multiplying the amount to the finished goods end. See
schedule 1 for the computation.
Therefore, this account consists only of finished goods at the end of the
period since the company immediately expensed their supplies as they are
immaterial amounts.
Note 3. Equipment
The equipment has an estimated useful life 36 months with no salvage
value. However, after the month of purchase, the company does not use the
equipment anymore. This, then, makes the equipment idle. However, PFRS
dictates that idle equipment should still be reported and depreciated.
Note 4. Preoperating expenses
The company incurred business permit fees for registering the company.
Fire safety
P 89
Community tax paid
16.8
Business permit
965
Sanitary inspection fee
1 260
DTI
215
Other expenses
___297____
P 2 842.80
Note 5. Other expenses
These are expenses that are not normally incurred by the business.
This account is comprised of re-registration of business fee.
Note 6. Salaries
Salary is P150/month per employee.
Note 9. Cost of Sales

Cost of sales vary per month. See schedule 1 for the computation.
Note 10. Sales
sales.

All company sales comprise only of cash