KING RICH PHARMACY

Accounting policies and explanatory Notes to the Financial

Statements for the year ended 31 December 2013
1. General information
The business is a single proprietorship with address and principal place of business at Landing, Casisang, Malaybalay City.
The principal activity is Pharmacy.
2.

Basis of preparation and accounting policies

These financial statements have been prepared in accordance with the International Financial Reporting Standard for Small and
Medium- sized Entities issued by the International Accounting Standards Board. They are presented Philippine currency.
Revenue recognition
Revenue from sales of goods is recognized when the goods are delivered and title has passed. Revenue is measured at the fair
value of the consideration received or receivable.
Cost and Expense Recognition
Costs and Expenses, not directly attributable to capitalizable assets or projects, are recognized and charged to operations as
incurred.
Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on
taxable profit for the year.
Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses. Depreciation is charged so as to allocate the cost of assets less their residual values over their estimated useful lives,
using the straight-line method. The following annual rates are used for the depreciation of property, plant and equipment: If there
is an indication that there has been a significant change in depreciation rate, useful life or residual value of an asset, the
depreciation of that asset is revised prospectively to reflect the new expectations.

Property, Plant and Equipment

Store Furniture & Fixtures
Less; Accum. Depreciation
Book Value

P
P

18,000.00
(10,200.00)
___________
7,800.00
===========

Impairment of assets
At each reporting date, property, plant and equipment are reviewed to determine whether there is any indication that those
assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected
asset (or group of related assets) is estimated and compared with its carrying amount. If estimated recoverable amount is lower,
the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognized immediately in profit
or loss

3.

Cash and cash equivalents

Cash includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible
to known
amounts of cash and with original maturities of three months or less and that are subject to an
insignificant risk of change in value.
4.

Revenue Regulations
In compliance with the requirements set forth by RR 12-2010, hereunder are the information on taxes, duties and license
fees paid or accrued during the taxable year.
The company is a non-VAT registered company engaged in the business of Pharmacy and paid the amount of
P9,421.44
as percentage tax pursuant to the internal revenue laws/regulations and based on the amount reflected in the Sales/Gross
Income Received Account of P314,048.00.

5.

Other Taxes and Licenses:

a.
Local

b.

Real Estate Taxes

Mayors Permit
PTR
National
BIR Annual Registration
Percentage Taxes

P
P

4,735.00
P

P
P

500.00
9,421.44

c.

The amount of withholding taxes paid/accrued for the year amounted to:
i. Tax on compensation and benefits
P
ii. Creditable withholding tax/es
P iii.Final withholding tax/es
P -

d.

The company has not received a final assessment notice from the Regional Office of Northern Mindanao covering
the taxable year ______N/A_____ amounting to P_____N/A______, inclusive of penalties, for deficiency income
/VAT/Percentage/Withholding tax, which has been protested/agreed upon. (Management may include here there
opinion on the probable outcome of their application for installment/compromise/abatement, in case of agreed
assessment).
The company has no RATE case under preliminary investigation of the Department of Justice (DOJ) involving
deficiency income tax for taxable year _N/A_____
amounting to P __N/A______.

e.