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HP 5 of goods sold s profit rating expenses rating income er income/charges mnterest expense Dividend income oss on sale of land For the Year Ended December 31, 2022 (430,045.61) 12,650 (50,000) (6 (1

HP 5 of goods sold s profit rating expenses rating income er income/charges mnterest expense Dividend income oss on sale of land For the Year Ended December 31, 2022 (430,045.61) 12,650 (50,000) (6 (1

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In PHP Sales Cost of goods sold Gross profit Operating expenses Operating income Other income/charges Interest expense Dividend income Loss on sale of land Gain on sale of building Income before income tax Income tax expense Net income Goodbye 99 Series Company Income Statement For the Year Ended December 31, 2022 8,900,000 (6,141,000) 2,759,000 (1,235,250) 1,523,750 (430,045.61) 12,650 (50,000) 86,250 (381,145.61) 1,142,604.39 (285,651.10) 856,953.29 Additional information: All sales are on account. During the year, accounts receivable written off amounted to P325,000 while recoveries of accounts receivable previously written off totaled P275,000. (Hint: Use the increase/decrease in the net realizable value of accounts receivable (instead of gross amount) to answer requirement 1.) Two transactions affected the buildings account in 2022. A new building was purchased during the year by issuing a note payable due in 2023 while another was sold for cash. Buildings are depreciated using the straight-line method with a 50-year useful life and no residual value. A full year's depreciation is recorded on the year of acquisition and none on the year of disposal. Without the acquisition, depreciation expense of P734,000 would have been recorded in 2022 on the remaining buildings (excluding the disposed building). Accounts payable are solely used for purchases of inventories from suppliers. All purchases are on account. Other payables are used exclusively for recording operating expenses to be paid in cash. Notes payable are interest-bearing in nature with maturities of 1 year or less. The 2021 year-end balance of the said account was accordingly paid in full during the year. The company issued bonds on December 31, 2021 for cash. The bonds require annual interest payment of 10% every December 31 and will mature in 5 years. Treasury stock was reissued during the year for P40,000. Both a cash and a small stock dividend were declared during the year. No errors were noted in recording the company's transactions for 2022. REQUIREMENTS: 1) Prepare the operating activities section of Goodbye 99 Series Company's statement of cash flows for 2022 using the indirect method. .
Transcribed Image Text:In PHP Sales Cost of goods sold Gross profit Operating expenses Operating income Other income/charges Interest expense Dividend income Loss on sale of land Gain on sale of building Income before income tax Income tax expense Net income Goodbye 99 Series Company Income Statement For the Year Ended December 31, 2022 8,900,000 (6,141,000) 2,759,000 (1,235,250) 1,523,750 (430,045.61) 12,650 (50,000) 86,250 (381,145.61) 1,142,604.39 (285,651.10) 856,953.29 Additional information: All sales are on account. During the year, accounts receivable written off amounted to P325,000 while recoveries of accounts receivable previously written off totaled P275,000. (Hint: Use the increase/decrease in the net realizable value of accounts receivable (instead of gross amount) to answer requirement 1.) Two transactions affected the buildings account in 2022. A new building was purchased during the year by issuing a note payable due in 2023 while another was sold for cash. Buildings are depreciated using the straight-line method with a 50-year useful life and no residual value. A full year's depreciation is recorded on the year of acquisition and none on the year of disposal. Without the acquisition, depreciation expense of P734,000 would have been recorded in 2022 on the remaining buildings (excluding the disposed building). Accounts payable are solely used for purchases of inventories from suppliers. All purchases are on account. Other payables are used exclusively for recording operating expenses to be paid in cash. Notes payable are interest-bearing in nature with maturities of 1 year or less. The 2021 year-end balance of the said account was accordingly paid in full during the year. The company issued bonds on December 31, 2021 for cash. The bonds require annual interest payment of 10% every December 31 and will mature in 5 years. Treasury stock was reissued during the year for P40,000. Both a cash and a small stock dividend were declared during the year. No errors were noted in recording the company's transactions for 2022. REQUIREMENTS: 1) Prepare the operating activities section of Goodbye 99 Series Company's statement of cash flows for 2022 using the indirect method. .
Goodbye 99 Series Company's comparative balance sheet for 2021 and 2022 and income statement for 2022 are presented below: Goodbye 99 Series Company Comparative Balance Sheet As of December 31 In PHP 2022 2021 Current assets Cash 1,440,571.43 1,103,922.43 3,500,000 Accounts receivable, gross 4,650,000 Less: Allowance for doubtful accounts (345,000) (275,000) Inventories 3,150,000 8,895,571.43 2,800,000 7,128,922.43 Non-current assets Investment in equity securities - FVOCI 1,650,000 1,000,000 Land 9,500,000 10,250,000 Buildings 15,750,000 16,250,000 Less: Accumulated depreciation (5,698,565) 21,201,435 (5,096,315) 22,403,685 30,097,006.43 29,532,607.43 2,980,000 2,325,000 1,150,000 1,763,000 130,000 90,000 183,000.10 124,000 50,000 75,000 1,550,000 6,043,000.10 2,000,000 6,377,000 3,000,000 3,000,000 (182,240.96) 2,817,759.04 (216,286.57) 2,783,713.43 8,860,759.14 9,160,713.43 10,500,000 9,000,000 6,249,000 5,085,000 250,000 (100,000) 4,267,247.29 6,466,894 (30,000) (80,000) 21,236,247.29 20,371,894 30,097,006.43 29,532.607.43 Total assets Current liabilities Account payable Other payables Interest payable Income tax payable Dividends payable Notes payable Non-current liabilities Bonds payable Less: Discount on bonds payable Total liabilities Shareholders' equity Capital stock Additional paid-in capital Unrealized gain (loss) on change in investment fair value - OCI Retained earnings Less: Treasury stock Total shareholders' equity Total liabilities and shareholders' equity
Transcribed Image Text:Goodbye 99 Series Company's comparative balance sheet for 2021 and 2022 and income statement for 2022 are presented below: Goodbye 99 Series Company Comparative Balance Sheet As of December 31 In PHP 2022 2021 Current assets Cash 1,440,571.43 1,103,922.43 3,500,000 Accounts receivable, gross 4,650,000 Less: Allowance for doubtful accounts (345,000) (275,000) Inventories 3,150,000 8,895,571.43 2,800,000 7,128,922.43 Non-current assets Investment in equity securities - FVOCI 1,650,000 1,000,000 Land 9,500,000 10,250,000 Buildings 15,750,000 16,250,000 Less: Accumulated depreciation (5,698,565) 21,201,435 (5,096,315) 22,403,685 30,097,006.43 29,532,607.43 2,980,000 2,325,000 1,150,000 1,763,000 130,000 90,000 183,000.10 124,000 50,000 75,000 1,550,000 6,043,000.10 2,000,000 6,377,000 3,000,000 3,000,000 (182,240.96) 2,817,759.04 (216,286.57) 2,783,713.43 8,860,759.14 9,160,713.43 10,500,000 9,000,000 6,249,000 5,085,000 250,000 (100,000) 4,267,247.29 6,466,894 (30,000) (80,000) 21,236,247.29 20,371,894 30,097,006.43 29,532.607.43 Total assets Current liabilities Account payable Other payables Interest payable Income tax payable Dividends payable Notes payable Non-current liabilities Bonds payable Less: Discount on bonds payable Total liabilities Shareholders' equity Capital stock Additional paid-in capital Unrealized gain (loss) on change in investment fair value - OCI Retained earnings Less: Treasury stock Total shareholders' equity Total liabilities and shareholders' equity
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