Scribd
Upload
110 views

Sample Problems Cash Flow Analysis

The company reported an increase in assets from 2021 to 2022, including higher cash, accounts receivable, and property, plant, and equipment. Liabilities increased due to higher income tax payable. The income statement shows sales increased from 2021 and cost of goods sold also increased, resulting in higher gross income. Expenses increased but net income increased to $1,500,000.

Uploaded by

Teresa Alberto
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
110 views

Sample Problems Cash Flow Analysis

The company reported an increase in assets from 2021 to 2022, including higher cash, accounts receivable, and property, plant, and equipment. Liabilities increased due to higher income tax payable. The income statement shows sales increased from 2021 and cost of goods sold also increased, resulting in higher gross income. Expenses increased but net income increased to $1,500,000.

Uploaded by

Teresa Alberto
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Comprehensive Illustration

Company provided the following statement of financial position at year-end and other financial
data relating to activities during current year:
2022 2021
Cash and cash equivalents 600,000 200,000
Accounts receivable, net of allowance 1,100,000 1,040,000
Notes receivable - trade 150,000 200,000
Inventory 1,200,000 1,360,000
Prepaid expenses 110,000 120,000
Investment, at cost 300,000 500,000
Property, plant and equipment 3,400,000 2,000,000
Accumulated depreciation (900,000). (600,000).
Patent - 80,000
5,960,000 4,900,000

Accounts payable 880,000 840,000


Notes payable- trade 60,000 240,000
Accured expenses 100,000 330,000
Note payable- bank(short term debt) 400,000 -
Share capital, P100par 3,000,000 2,400,000
Share premium 530,000 400,000
Retained earnings 990,000 790,000
Treasury shares, at cost - ( 100,000).
5,960,000 4,900,000

The statement of retained earnings for the year ended December 31, 2022 showed the following:

Retained earnings- January 1 790,000


Add: Net Income for 2022 1,000,000
Total 1,790,000
Less: Cash dividends paid 800,000
Retained earnings- December 31 990,000

Additional Information:
* The entity sold any investment for P240,000 cash. There were no other transactions affecting the investment.
* Land was purchased in the current year for P1,200,000. paying P1,000,000 cash and issuing P200,000
share capital at par value.
* Equipment costing P200,000 and have a carrying amount of P80,000 was sold for P60,000 cash.
* Equipment of P400,000 was purchased for cash.
* The entity borrowed P400,000 from a bank to be paid June 30, 2023.
* Share capital with par value of P400,000 was issued for cash at a premium of P100,000.
* The treasury shares were reissued for P130,000 cash.
* The patent was fully amortized.
Income Statements
Year ended December 31, 2022

Sales 5,000,000
Cost of sales:
Inventory- January 1 1,360,000
Purchases 3,200,000
Goods available for sale 4,560,000
Inventory- December 31 1,200,000 3,360,000
Gross Income: 1,640,000
Gain on sale of investment 40,000
Total income 1,680,000

Expenses:
Loss on sale of equipment 20,000
Salaries 100,000
Other expenses 60,000
Depreciation 420,000
Amortization of patent 80,000 680,000
Net income 1,000,000
Illustration- Operating activities
Simple Company reported the following comparative statement of financial position and income statement for 2022.

Assets 2022 2021


Cash 3,000,000.00 2,000,000
Accounts receivable 940,000.00 350,000
Inventory 175,000.00 100,000
Prepaid insurance 15,000.00 20,000
Property, plant and equipment 2,000,000.00 2,000,000
Accumulated deprecitation ( 550,000). ( 500,000).
Patent 40,000.00 50,000
Total assets 5,620,000 4,020,000

Liabilities and Equity


Accounts payable 170,000 150,000
Accured salaries payable 25,000 10,000
Accured interest payable 10,000 15,000
Income tax payable 350,000 250,000
Unearned rent income 10,000 40,000
Mortage payable 500,000 500,000
Share capital 2,000,000 2,000,000
Retained Earnings 2,555,000 1,055,000
Total liabilities and equity 5,620,000 4,020,000

Income Statements
Year ended December 31, 2022
Sales 6,500,000
Cost of goods sold:
Inventory- January 1 100,000
Purchases 3,200,000
Goods available for sale 3,300,000
Inventory- December 31 (175,000). 3,125,000
Gross Income: 3,375,000
Rent income 80,000
Total income 3,455,000

Expenses:
Salaries 950,000
Insurance 40,000
Other expenses 500,000
Depreciation 50,000
Amortization of patent 10,000
Interest expense 55,000 1,605,000
Income before tax 1,850,000
Income tax 350,000
Net income 1,500,000

You might also like