Financial Aspect

A. Financial Assumptions

1.) Statement of Financial Position

a. Assets

1. Raw Materials Inventory

The ending balance of raw materials inventory assigned each year is based

on a target inventory holding to match forecasted demand.

2. Finished Goods Inventory

The ending balance of finished goods inventory assigned each year is

based on a target inventory holding to match forecasted demand.

3. Office Supplies Inventory

The office supplies on hand is 20% of the total supplies inventory.

4. Temporary Investment

Investment of excess cash is made one the cash available reach 500,000.

5. Rent Deposit

A security deposit is made for the factory and store rent. Factory rent is

subject to three months deposit while store rent is subject to two months

deposit.

6. Property Plant and Equipment & Furnitures and Fixtures

Depreciation method is based on a straight line method

b. Liabilities

1. Employee benefits payable

SSS, HDMF, PhilHealth and Withholding Tax are payable for one

month.

2. Value Added Tax Payable

The firm is vat registered and value-added tax is payable monthly.

3. Income Tax Payable

Income tax is paid on a quarterly basis. However, one quarter is

left unpaid at the end of the accounting period.

4. Utilities Payable

Utilities Payable covers electricity, water and telecommunications.

Accrual of one-month utilities expense is made during the last

month of the calendar year.

c. Partners’ Capital

Each partner has a share of 20% of the total capital. No additional

investment has been made for the next five years. Managing

partner will receive a fixed salary for 10,800.

d. Partner’s Withdrawal

Each partners are assumed to make withdrawals annually.

2.) Statement of Comprehensive Income

a. Sales

Sales used are projected based on the demand and supply gap schedule.

b. Sales Discount

The sales discount is only 1% for the year which includes holiday and

summer discounts.

d. Raw Materials

The frequency of purchasing raw materials is on a monthly basis. The

purchases of raw materials inventory assigned each year are based on a

target inventory holding to match raw materials used.