Significant changes to be made during the year are listed below:substantial investments in new product lines and in a modernization program,During the next fiscal year ending June 30, 2020, Texas Company will nakeSienificant changes to be made during the year are listed below:L Equipment with a net book value of P86,000 will be sold during the year.2 All of the capital stock of Ohio Company will be exchanged with 5,000shares of Texas Company at a time when the market value is P40 per share.P250,000 cash will also be given as part payment.3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at98%.4. Trading securities carried at market value of P200,000 will be sold forP215,000.5. New equipment will be purchased during the year.6. A new building will be purchased at a cost of P1,000,000, although there areno building retirements.1. Cash dividends wil! be paid to stockholders.The financial statements forecast for the vear ended June 30, 2020 are givennext page: Income SiatementFor the Year Ended June 30, 2020Net salesCost of gonds sold (including depreciationof P191,500,Operating expenses (including depreciationP2,430,500P1,073,000of P100,000)Interest expenseGain on sale of equipmentGain on sale of trading securitiesUnrealized holding gain on trading securities500,0007,500(26,000)(15,000)(44,000)356,000P1,851,500P 579,000Income taxTotalNet incomeTexas CompanyBalance SheetsJune 30Assets20202019P442,000325,000CashP532,000275,000Trading Securities(market)Accounts receivableInventories80,500141,500168,500450,00043,00086,000Investment in Associates (cost)Land43,000321,500Buildings (net)Equipment (net)Total assets1,095,000352,000P3,057,000242,500P1,540,500Liabilities & EquityP 93,500P107,50050,000Accounts payableShort-term bank loans payableAccrued operating expensesIncome tax payableBonds payable (net)Common stock, P10 par valueAdditional paid in capitalRetained earningsTotal liabilities & equity50,00020,500143,000980,00041,500156,500550,000500,000400,000250,000820,000P3,057,000435,000P1,540,500REQUIRED:a forccast cash flow statement for the vear ended June 30,** 1ow supporting schedules or T-accounts for many missing amounts.

1.) Cash flow statement of Texas Company for the year ending on June 30, 2020 :

During the next fiscal year endìng June 30, 2020, Texas Company will make tantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1 Equipment with a net book value of P86,000 will be sold during the year. 2 All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 1. Cash dividends wil! be paid to stockholders. The financial statements forecast for the year ended June 30, 2020 are given next page:

During the next fiscal year endìng June 30, 2020, Texas Company will make tantial investments in new product lines and in a modernization program. Significant changes to be made during the year are listed below: 1 Equipment with a net book value of P86,000 will be sold during the year. 2 All of the capital stock of Ohio Company will be exchanged with 5,000 shares of Texas Company at a time when the market value is P40 per share. P250,000 cash will also be given as part payment. 3. Bonds having a face value of P1,000,000 will be issued on June 30, 2020 at 98%. 4. Trading securities carried at market value of P200,000 will be sold for P215,000. 5. New equipment will be purchased during the year. 6. A new building will be purchased at a cost of P1,000,000, although there are no building retirements. 1. Cash dividends wil! be paid to stockholders. The financial statements forecast for the year ended June 30, 2020 are given next page:

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 8P: At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the...

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