MAGNA COMPANY

Statement of Financial Position

December 31, 2013

ASSETS

Current assets: Note
Cash and cash equivalent P 400,000
Trading securities 100,000
Trade and other receivables 700,000
Inventories 800,000
Prepaid expenses 100,000
Total current assets 2,100,000

Noncurrent assets:
Property, plant and equipment 7,150,000
Long-term investments 1,310,000
Intangible assets 3,350,000
Other noncurrent assets 150,000
Total noncurrent assets 10,110,000

Total assets P 12,900,000

LIABILITIES AND SHAREHOLDERS EQUITY

Current liabilities:
Trade and other payables 1,000,000
Total current liabilities 1,000,000

Noncurrent liabilities:
Bonds payable 6,000,000
Total noncurrent liabilities 6,000,000

Shareholders equity
Share capital 7,000,000
Reserves 700,000
Retained earnings (deficit) (1,800,000)
Total shareholders equity 5,900,000
Total liabilities and shareholders equity P 12,900,000





ASSETS
Current Assets: unrestricted cash and cash equivalent, short- term investments, and
other assets that is convertible to cash or expended within one year.

1. Cash and cash equivalent: cash on hand, deposits with banks, cash for revolving
use, petty cash , and short-term and highly liquid investment that
can be converted into a fixed amount of cash with interest
fluctuation having small impact thereon, excluding those already set
aside for use or restricted by law or contract. It is an asset that
appears on the statement of financial position of a business and
includes currency (coins and bank notes) held by a business (in hand
and in bank accounts) and cash equivalents.
Cash: a medium of exchange, a store of value and a unit of account and a
business needs to have sufficient cash in order to be able to pay its
liabilities. A business generates cash from sale of products and
services, sale of assets, borrowings from banks and other creditors and
from capital contributions by its owners. It uses cash to pay for its
operating and capital expenditure, its liabilities and in paying
dividends to its owners.
Cash equivalent: are not precisely coins and bank notes but are marketable
securities of very short-term maturity (typically always less
than 3 months) which are not expected to deteriorate
significantly in value till maturity.
2. Financial asset at fair value: Financial assets at fair value through profit or
loss include financial assets held-for-trading and financial assets
designated upon initial recognition at fair value through profit or loss.
Financial assets are classified as held-for-trading if they are acquired
for the purpose of selling in the near term. Derivative assets, including
separated embedded derivatives are also classified as held-for-trading
unless they are designated as effective hedging instruments. Financial
assets at fair value through profit and loss are carried in the
consolidated balance sheet at fair value with gains or losses recognized
in the consolidated statement of income under Gains or Losses on
Derivative Financial Instrument Transactions for derivative instruments
and Other Income or Expense for non-derivative financial assets.
3. Trade and other receivables: categorized as loans and receivables, are recognized
initially at fair value and subsequently measured at amortized cost
using the effective interest rate method, less provision for
impairment. A provision for impairment of trade and other receivables
is established when there is objective evidence that we will not be
able to collect all amounts due according to the original terms of
the receivables. Significant financial difficulties of the debtor,
probability that the debtor will enter bankruptcy or financial
reorganization, and default or delinquency in payments are considered
indicators that the trade receivable is impaired. The amount of the
provision is the difference between the assets carrying amount and
the present value of estimated future cash flows, discounted at the
original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is
immaterial. The carrying amount of the asset is reduced through the
use of an allowance account and the amount of the loss is recognized
in the consolidated statement of income. When a trade and other
receivable are uncollectible, it is written-off against the allowance
account for trade and other receivables. Subsequent recoveries of
amounts previously written-off are recognized as income in the
consolidated statement of income.

Accounts receivable: claims of the business entity arising from selling of
goods or services; the accounting nature, valuation and required
notes are as follows:
Shall be valued at the present value or may be valued at the book value
if maturing within one year.
Unrealized interest revenues from installment sales shall be presented as
the contra account of the accounts receivable.
Accounts receivable to be collected over one year shall be specified in
the notes for the amount expected collection of each year.
Accounts receivable determined as uncollectible shall be written off.
Accounts receivable shall be valued at closing for the uncollected
amount, and an allowance for the uncollectible amount shall be properly
provided and presented as the contra account of the accounts receivable.

Notes receivable: various notes which are collected by the business entity. The
accounting nature, valuation and required notes are as follows:
Be valued at the present value, or may be valued at the face value if
maturing within one year.
Notes receivable that were discounted or transferred to others shall be
deducted and specified.
Notes receivable arising from operations shall be presented separately
from those not arising from operations.
Uncollectible notes shall be written off.
Shall be valued at closing for the uncollectible amount shall be properly
provided and presented as the contra account of the notes.

Accrued interest on notes receivable: is a current asset if the interest amount
is expected to be collected within one year of the balance sheet date.
Even in the case of long term note receivable due in five years will
require that the interest on the note be paid quarterly, semiannually or
annually making it a current asset. If the interest on the note is not
expected to be received within one year of the balance sheet date, then
the accrued interest receivable should be reported as a long term asset.

4. Inventories: are merchandise or goods, either finished goods or by-products for
sale in normal operations along with goods that are work-in-process
to be sold upon completion, or raw materials or supplies used
directly or indirectly in the production of goods (or services) for
sale; the account nature, valuation and required notes are as
follows:
Shall be valued using the lower of cost or market price method.
Those with defect, damage or obsolescence causing an obvious decline I
value shall be based on net realizable value.

5. Prepaid Expenses A type of asset that arises on a balance sheet as a result of business making payments
for goods and services to be received in the near future. While prepaid expenses are initially recorded as assets,
their value is expensed over time as the benefit is received onto the income statement, because unlike
conventional expenses, the business will receive something of value in the near future.

6. Long-term Investments: defined as investments of a long-term
nature, such as investment in other enterprises, purchases of
long-term bonds or investments in real estate or other related
investments;
sinking fund - A means of repaying funds that were borrowed through a
bond issue. The issuer makes periodic payments to a trustee who
retires part of the issue by purchasing the bonds in the open
market.

Cash surrender value - The sum of money an insurance company will pay to
the policyholder or annuity holder in the event his or her policy is
voluntarily terminated before its maturity or the insured event occurs. This
cash value is the savings component of most permanent life insurance
policies, particularly whole life insurance policies. Also known as "cash
value", "surrender value" and "policyholder's equity".

Preference share redemption fund -

7. Intangible assets

Computer software

Lease rights

8. Other noncurrent assets:


Other assets are defined as assets that do not belong to the previous five
categories of assets and whose collection or liquidation extends over one
year
Advances to officers not currently collectible - represents a cash payment (loan)
made by the employer for the business expenses that are anticipated to be incurred by the employee or
officer on behalf of the employer; and the employee is obligated to prove business expenses to the
employer.

Long term Refundable Deposit: defined as the cash or other assets
provided to others for the purpose of guarantee.

9. Property, plant and equipment - defined as tangible assets which are
provided for use in operations, not intended for sale, and used for more than
one year; the account categories, valuation and required notes are as
follows:
1. Land: defined as land or permanent land improvements used in
operations; its valuation includes acquisition costs, land
improvements of a permanent nature and increases in value from
revaluation, etc. The estimated reserve provided for land value
increment tax on the increase in value from revaluation shall be
classified as a long-term liability. Land that is temporarily
registered under the name of others, rather than that of the
business entity itself, due to legal restrictions shall be
disclosed in the notes and all safeguarding measures shall be
specified.
2. Buildings: defined as self-owned building and structures and
other
accessory facilities; the valuation includes acquisition costs of
the building and structures, capitalized expenditures after
acquisition that extend the useful life or service potential of
the asset, and increases in value from revaluation.
3. Equipment: defined as self-owned equipment or
shall be valued at cost and may be classified as fixed assets or
intangible assets. Leasehold improvements must be depreciated or
amortized reasonably and systematically without interruption
based
on its durable lifespan or lease term, depending which one comes
first, then they can be transferred as a compensation in a
rational
and systemic method or share its cost.


10. Trade and other payables

Accounts payable
Accrued salaries
SSS payable
Notes payable
Withholding tax
Unearned rent income
Dividends payable

11. Bonds payable

Premium on bonds -

12. Share Capital

Ordinary share capital
Preference share capital
Share premium

Retained earnings