272 Chapter 6 Problem 3 (Cash Flow from Operating Activities) Bleu Company's income statement for the year ended December 31, 2018, is · as follows: Bleu Company Income Statement For the Year Ended December 31, 2018 Revenue Sales Services P110,000 75,000 P185,000 Expenses Cost of goods sold Selling and administrative expenses Depreciation expense Amortization of intangibles Income before income taxes P 96,000 45,000 25,000 7,000 173,000 12,000 4,200 P 7,800 Income tax expense Net income Earnings per ordinary share PO.78 Required: Compute the amount of cash from operating activities for the year by the direct method, assuming the following: (a) A sale of P15,000 resulted in the acceptance of a three-year, 8% note receivable. All other sales were for cash. (b) The P4,200 provision for income taxes is distributed as follows: Paid during 2018 Deferred P2,940 1,260 P4,200 The deferral relates to the temporary difference resulting from the use of accelerated cost recovery for tax purposes and straight-line for income statement reporting purposes. (c) All current assets (other than cash) and current liabilities remained constant during 2018.
272 Chapter 6 Problem 3 (Cash Flow from Operating Activities) Bleu Company's income statement for the year ended December 31, 2018, is · as follows: Bleu Company Income Statement For the Year Ended December 31, 2018 Revenue Sales Services P110,000 75,000 P185,000 Expenses Cost of goods sold Selling and administrative expenses Depreciation expense Amortization of intangibles Income before income taxes P 96,000 45,000 25,000 7,000 173,000 12,000 4,200 P 7,800 Income tax expense Net income Earnings per ordinary share PO.78 Required: Compute the amount of cash from operating activities for the year by the direct method, assuming the following: (a) A sale of P15,000 resulted in the acceptance of a three-year, 8% note receivable. All other sales were for cash. (b) The P4,200 provision for income taxes is distributed as follows: Paid during 2018 Deferred P2,940 1,260 P4,200 The deferral relates to the temporary difference resulting from the use of accelerated cost recovery for tax purposes and straight-line for income statement reporting purposes. (c) All current assets (other than cash) and current liabilities remained constant during 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:272
Chapter 6
Problem 3 (Cash Flow from Operating Activities)
Bleu Company's income statement for the year ended December 31, 2018, is
· as follows:
Bleu Company
Income Statement
For the Year Ended December 31, 2018
Revenue
Sales
Services
P110,000
75,000
P185,000
Expenses
Cost of goods sold
Selling and administrative expenses
Depreciation expense
Amortization of intangibles
Income before income taxes
Income tax expense
Net income
P 96,000
45,000
25,000
7,000
173,000
12,000
4,200
P 7,800
Earnings per ordinary share
PO.78
Required:
Compute the amount of cash from operating activities for the year by the
direct method, assuming the following:
(a) A sale of P15,000 resulted in the acceptance of a three-year, 8% note
receivable. All other sales were for cash.
(b) The P4,200 provision for income taxes is distributed as follows:
Paid during 2018
Deferred
P2,940
1,260
P4,200
The deferral relates to the temporary difference resulting from the use of
accelerated cost recovery for tax purposes and straight-line for income
statement reporting purposes.
(c) All current 'assets (other than cash) and current liabilities remained
constant during 2018.
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