BUSINESS MATH

By: IST
 Four Financial Statements
1. Balance Sheet / Financial Position
• assets
• liabilities
• capital
2. Income Statement
• revenue or income
• expenses
– Gross Income (total revenue, WITHOUT deduction)
– Net Income (Revenue less Expense; R > E)
– Net Loss (E > R ; Expense is greater than Revenue)
3. Statement of Owner’s Equity
• capital and drawing in a CERTAIN PERIOD
4. Statement of Cash Flow
• Received cash; on going operations
• Cash receipts and payments
 ASSET
CURRENT ASSETS
1. Cash – A medium of exchange that is
in currency form.
2. Account Receivable – Money owed by
the customers or debtor acquired
through service rendered and goods
purchased on accounts
3. Notes Receivable – debts endorsed
through promissory notes.
 ASSET
FIXED ASSETS
Land
Buildings
Vehicles
Office/ Store Supplies
Office/Store equipment and machineries
Furniture and Fixtures
 ASSET
INTANGIBLE ASSETS
Franchise
Copyright
Trademarks
Patent
Software
 LIABILITIES
• Unearned Revenue – an income collected by the
business in advance whose product or service is yet
to be provided.
1. Current Liability
• Accounts Payable
• Notes Payable
• Salaries Payable
• Utilities Payable
• Interest Payable – Interests accumulated from debts
2. Long-term Liability
• Mortgage Payable
• Loan Payable
• Bonds Payable
 CAPITAL
•Owner’s Capital – invested/investment
•Owner’s Drawing – account used for assets
withdrawn by the owner for personal use.
 REVENUE
•Sales
•Commissions
•Service Revenue
•Rent Income
•Interest income
 EXPENSES
•Salaries Expense
•Utilities Expense
•Rent Expense
• Bookkeeping – recording all the
transaction in a systematic manner
• Classifying – grouping similar and
interrelated business transactions by
posting it to the ledger
• Summarizing – preparing financial
statements
• Journalizing – recording business
transaction in a book of original entries
called a journal
• Posting –transferring entries from journal
to ledger.
• Adjusting entries are used to:
a. close the books
b. record accruals
c. correct errors
• Reminders:
– Pag column ang tinatanong, it’s either DEBIT
or CREDIT lang
– Pag ang transaction nag end sa “on account
or on credit” ang credit side ay Accounts
Payable pero pag wala, automatic ang credit
side ay Cash
– Lahat ng pumasok DEBIT, lahat ng lumabas
CREDIT
– I-analyze maigi ang transaction bago mag
answer 
• Reminders:
– Pag gross sales, walang bawas ang pipiliin
– Pag net sales naman ibawas ang expenses
– Pag depreciation value, if given na yung
value, iconvert ang percentage into decimal,
then multiply sa amount
– If per yearly or monthly ito ang formula;
total amount – depreciation value
time (months if needed)
• Reminders:
– Pag kukuha ng percentage, mauuna ang
maliit na value sa mas malaking value,
kaylangan naka decimal muna then multiply
sa 100 para maging whole number, kapag
dinivide mo at naka whole number agad,
baliktarin mo yun pag divide dahil baka
nagkamali ka lang 
– Pag wala yung exact answer, hanapin ang
pinaka malapit
BLESSING NOTES
• Statement cash flows, the information
concerning the cash inflows and outflows
• Closing entries are made, in order to
transfer net income/loss and owner's
drawings to the owner's capital account
• Trade companies – business to receive
goods and services before paying
• example of external finance – Bank loan
• Capital gain – shareholder sells his
shares for more than he paid
• point at which the level of sales of a
business exactly equals its costs – Break-
even point
• Current Assets-Current Liabilities –
Working capital
• does not appear in a Balance Sheet –
Depreciation Expense
• Net Income or Profit results from,
revenues exceeding expenses
• Assets are normally recorded at – cost
• Using the double entry system, every
business transaction – affects two or
more accounts
• accounts payable – debt incurred by
buying from a supplier on credit
• financial report measures results for a
period of time – Income Statement
• Remainder after all expenses deducted –
Net Income
• Expenses – Income Statement
• Purchased computer set, debit computer
set, credit cash
• Customers obligation – Asset
• Received cash, on going operation – Cash
Flow
• Mathematical operatives that lead to
solution – Algorithms
• Everyday we need – Mathematics
• Quantitative finance – Mathematical
Finance
• Net income sales – Income statement
• Asset – Balance sheet
• Liabilities and Capital added – Balance
sheet
• Earning power – Income Statement
• Balance sheet provides, list of all assets
of the firm
• Increase of income – Debit
• Acquire through creditors - Asset
• Requires 15 months of payment – Long-
term liability
• Best applies to current asset – Accounts
receivable
• Non-current assets – Properties and
equipment
• Received in exchange for delivery of
goods – Income
• Decreases in Owner’s equity – Expenses
• Resources owned – Assets
• Acquired assets through obligations –
Liability
• Business owned will be due not to exceed
a year – Current Asset
• Requires prompt payment – Current
Liability
COMPUTATION
Jeff receives P2,500 from her parents as
monthly allowance. He spends 3/5 for
dormitory fee and utilities, 1/5 for her other
needs and saves the rest. How much does
she save?
A. P1000
C. P850
B. P750
D. P500
USING SCIENTIFIC CALCULATOR

2500 – ( 2500 (4/5)) = 500

MANUAL COMPUTATION

3/ 5 + 1/5 = 4/5
2500 X 4/5 or 2500 / 5 = 500
500 X 4 = 2000
2500 – 2000 = 500
D. 500
Christine is a saleslady in Miniso Department Store.
She received a salary of P 10,000 a month plus a
commission of 1% on all her sales. Last month, her
total sales was P35,000. How much did she earn for
the month?
A. P 10,035.00
B. P 10,003.50
C. P 10,350.00
D. P 10,530.00
USING SCIENTIFIC CALCULATOR

10000 + (35000 X 0.01)

= 10, 350
MANUAL COMPUTATION
1 % / 100 = 0.01
35000 X 0.01 = 350
10000 + 350 = 10, 350

C. P 10,350.00
If a skirt marked down 25%, what will the
purchase price be?
A. P25.00
B. 75% of its original price
C. 50% off
D. P75.00
B. 75% of its original
price
• Find the profit of Ronnel's water refilling
business with revenue of ₱56,000,000 and
costs of ₱42,000,000

a. ₱14,000,000
b. ₱140,000
c. ₱1,400,000
d. ₱14,000
56,000,000 – 42,000,000
= 14,000,000
• Niko's food stall has costs of ₱2,900. Her
total food sales are ₱11,600. What percent
of her food sales do the food costs
represent

a. 20%
b. 25%
c. 27%
d. 30%
2,900 / 11,600
= 0.25 X 100
= 25 %
• Brea needs 250 cookies for a buffet. She
will make oatmeal raisin, macaroons, and
chocolate chunk cookies. She wants 25%
of the cookies to be oatmeal raisin and
15% of the cookies to be macaroons. How
many chocolate chunk cookies must Brea
bake?
a. 150
b. 125
c. 140
d. 100
 25 % oatmeal
+15 % macaroons
40 %

100 % - 40 % = 60 %
250 (total cookies)
250 * 0.60
= 150
• A customer places a special order through
480 Furniture Store. The list price in the
manufacturer's catalog is ₱1,600. 480
Furniture receives a 35% trade discount.
What is the net price for the furniture
order?

a. ₱560
b. ₱1,535
c. ₱1,565
d. ₱1,040
Shortcut in getting net price in Trade
Discount:
Subtract the given discount from 100%
then multiply to the given amount

100% - 35% = 65%

1,600 x 0.65 = 1,040

• Ron's Manufacturing offers discounts on
most of its products. What is the trade
discount rate on an item with a list price of
₱16.79 and a net price of ?₱2.42?

a. 22%
b. 26%
c. 54%
d. 74%
Trade Discount = List Price x Trade
Discount rate

Net Price = List Price – Trade Discount

TD = 16.79 x 2.42
= 40.63
But, in the given option, 26% is nearest to
the correct answer.