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Assets 2019 2018 cash and cash equivalents 750000

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Assets20192018Cash and cash equivalents750,000950,000Accounts receivable1,750,0001,100,000Inventory2,550,0001,800,000Prepaid expenses100,000150,000Property, plant and equipment5,300,0004,300,000Accumulated depreciation(1,150,000)(800,000)9,300,0007,500,000Downloaded by Krysha Jean Balladares ([email protected])lOMoARcPSD|9370134
Liabilities and equityAccounts payable1,250,0001,000,000Accrued expenses50,000200,000Share capital4,750,0004,250,000Retained earnings3,250,0002,050,0009,300,0007,500,000Additional information1.The statement of retained earnings for 2019 showed net income of P1,500,000 andcash dividend paid of P300,000.2.During the year, the entity purchased equipment for cash and issued share capitalfor cash.Required:Prepare a statement of cash flows for the current year using the indirect method.Answer:Hill CompanyStatement of Cash FlowsDecember 31, 2019Cash flow from operating activities:Net income1,500,000Increase in accounts receivable(650,000)Increase in inventory(750,000)Decrease in prepaid expenses50,000Increase in accounts payable250,000Decrease in accrued expenses(150,000)Depreciation350,000600,000Cash flow from investing activities:Purchase of equipment(1,000,000)Cash flow from financing activities:Issue of share capital500,000Payment of cash dividend(300,000)200,000Decrease in cash and cash equivalents(200,000)Downloaded by Krysha Jean Balladares ([email protected])lOMoARcPSD|9370134
Cash and cash equivalents – January 1950,000Cash and cash equivalent – December 31750,000Problem 17-3Sandy Company reported the following comparative statement of financial position atyear-end.Assets20192018Cash and cash equivalents120,000150,000Accounts receivable370,000210,000Inventory1,090,000860,000Prepaid expenses80,00090,000Property, plant and equipment4,300,0003,620,000Accumulated depreciation(840,000)(720,000)5,120,0004,210,000Liabilities and equityAccounts payable400,000345,000Salaries payable70,00040,000Income tax payable35,00015,000Accrued interest payable5,000-Bonds payable600,000-Share capital3,050,0003,050,000Retained earnings1,100,000760,000Treasury shares(140,000)-5,120,0004,210,000The income statement for the year ended December 31, 2019 showed the following:Sales4,450,000Cost of goods sold:Inventory – January 1860,000Purchases2,630,000Goods available for sales3,490,000Inventory – December 31(1,090,000)2,400,000Gross income2,050,000Gain on sales of equipment60,000Total income2,110,000Downloaded by Krysha Jean Balladares ([email protected])lOMoARcPSD|9370134
Expenses:Salaries640,000Insurance100,000Rent350,000Depreciation260,000Bad debt writeoff20,000Interest expense40,0001,410,000Income before tax700,000Income tax200,000Net income500,000Additional information1.Cash dividends of P160,000 were declared and paid during the year.2.Equipment costing P190,000 and with accumulated depreciation of P140,000 wassold for P110,000 cash.3.New equipment was purchased for cash.4.Bonds payable were issued for cash at the face value of P600,000.5.The treasury shares were purchased at cost P140,000.Required:a.Prepare a statement of cash flows using the direct method.b.Compute the cash flow operating activities using the indirect method.Answer:Sandy CompanyStatement of Cash FlowsDecember 31, 2019Cash flows from operating activities:Collections from customers4,270,000Payments to creditors(2,575,000)Salaries paid(610,000)Insurance paid(90,000)Rent paid(350,000)Cash generated from operations645,000Interest paid(35,000)Income tax paid(180,000)Downloaded by Krysha Jean Balladares ([email protected])lOMoARcPSD|9370134

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The Land, Generally Accepted Accounting Principles, Krysha Jean Balladares

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