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The December 31, 2012, income statement of Ghana Company contained the following condensed
information:
Revenues P2,520,000
Operating expenses(excluding depreciation) P1,872,000
Depreciation expense 180,000
Loss on sale of equipment 78,000 2,130,000
Income before income tax 390,000
Income tax expense 120,000
Net income P270,000
Ghana Company’s comparative statements of financial position at December 31, 2012 and 2011,
contained the following data:
2012 2011
Accounts receivable P111,000 P162,000
Accounts payable 123,000 93,000
Income taxes payable 12,000 25,500
*Pertains to operating expenses
Suarez Company uses the direct method, to prepare its statement of cash flows. Suarez’s trial balances
are as follows:
2010 2009
Cash 350,000 320,000
Accounts receivable 330,000 300,000
Inventory 310,000 470,000
Property, plant and equipment 1,00,000 950,000
Unamortized bond discount 45,000 50,000
Cost of goods sold 2,500,000 3,800,000
Distribution cost 1,415,000 1,720,000
General and administrative expenses 1,370,000 1,513,000
Interest expense 43,000 26,000
Income tax expense 7,567,000 9,761,000
Suarez allocated one-third of its depreciation expense to distribution costs and the remainder to general
and administrative expenses.
What amounts should Suarez in its statement of cash flows for the year ended December 31, 2010 for
the following?
Dela Pena Company provided the following data for the current year:
Cash balance, beginning of year 1,300,000
Cash flow from financing activities 1,000,000
Total shareholders’ equity, end of year 2,300,000
Cash flow from operating activities 400,000
Cash flow from investing activities (1,500,000)
Total shareholders’ equity, beginning of year 2,000,000
Santiago Company has provided the following account balances for the preparation of the statement of
cash flows for the current year:
January 1 December 31
Accounts receivable 1,500,000 1,450,000
Allowance for uncollectable accounts 40,000 50,000
Prepaid rent expenses 620,000 410,000
Accounts payable 970,000 1,120,000
Santiago’s net income for the year is P7,500,000. What is the net cash provided by operating activities?
2010 2009
Income tax 1,750,000 1,400,000
Deferred tax liability 210,000 140,000
Total income tax expense for 2010 was P2,000,000. What is the amount of cash paid for income tax in
2010?
Partial balance sheet data and additional information for Anderson Industries are given below:
Anderson Indutries
Partial Statement of Financial Position
December 31, 2015 and 2014
Liabilities
Accounts payable…………………………………………………………P95,000 P75,000
Additional Information:
(a) Net income for 2015 was P50,000.
(b) Depreciation expense for 2015 was P25,000
Required: prepare the operating activities section of the statement of cash flows, using the indirect
method, for the year ending December 31,2015.
Partial balance sheet data and additional information for Deloitte Industries are given below.
Deloitte Industries
Comparative Statement of Financial Position
December 31, 2015 and 2014
Equities
Common stock (P25 par)…………………………………………………………….300,000 200,000
Additional paid-in capital………………………………………………………………40,000 0
Retained earnings…………………………………………………………………………30,000 20,000
Additional Information:
(a) June 15, 2015- issued 4,000 shares of common stock for cash
(b) July 1,2015- purchased new equipment for cash
(c) December 31, 2015- paid cash dividends of P40,000
Required: prepare the investing and financing activities section of the statement of cash flows ending
December 31, 2015
The following is a comparative balance sheet for Top Ten Clothiers Inc. for the years 2015 and
2014.
The income statement for the year ended December 31, 2015, follows:
After paying cash dividends, the decrease in retained earnings totalled 95,000. Management is alarmed
by the shrinkage in the company’s cash position during 2015.
Required: prepare a statement of cash flows for 2015 using the direct method.
Additional information:
(a) Sold available for sale securities (not cash equivalents) costing P87,750 for P90,000.
(b) Equipment costing P18,750 with a book value of P3,750 was sold for P4,500.
(c) Issued 8% bonds payable at par, P375,000.
(d) Purchased new equipment for cash P310,125.
(e) Paid cash dividends of P22,500 during the year.
(f) Net income for 2015 was P45,000
(g) Proceeds from the notes payable were used for operating purposes.
Required: Prepare a statement of cash flows for Sage Corporation for 2015, using indirect method.
Problem 2
Adlake Corporation provides the following account balances for 2014 and 2015.
12/31/15 12/31/14
Accounts receivable………………………………………….. P70,600 P62,400
Inventory………………………………………………………….. 148,000 158,000
Accounts payable……………………………………………… 39,000 51,000
Short-term notes payable (for inventory)………… 41,600 40,000
Sales…………………………………………………………………. 616,600
Cost of good sold………………………………………………. 490,000
Depreciation expense……………………………………… 18,200
Amortization expense….………………………………… ... 2,600
Other expense…………………………………………………… 56,000
Loss on sale of building……………………………………… 3,000
Gain on sale of investments……………………………… 13,000
Required: prepare the operating activities section of the statement of cash flows under the indirect
method.