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Prepare a statement of cash flows for the current year.

Prepare a statement of cash flows for the current year.

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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Problem 17-7 (AICPA Adapted) Kenwood Company provided the following comparative statement of financial position: 2017 2016 450,000 700,000 1,200,000 1,000,000 3,165,000 ( 500,000) 165,000 1,000,000 1,050,000 1,500,000 1,050,000 850,000 730,000 Cash Accounts receivable, net of allowance Inventory Land Property, plant and equipment Accumulated depreciation 500,000 1,050,000 1,300,000 1,625,000 2,900,000 ( 450,000) 150,000 1,350,000 Patent Accounts payable Accrued expenses Bonds payable Share capital, P5 par Share premium Retained earnings 1,300,000 1,000,000 1,250,000 1,165,000 1,010,000 Additional data 1. The net income for the current year was P1,095,000. 2. On February 2, the entity issued a 10% stock dividend to shareholders of record on January 15. The market price per share was P15. 3. On March 1, the entity issued 19,000 shares for land. The land had a fair value of P200,000. 4. The entity purchased long term bonds with face of P500,000. A gain on retirement of bonds was reported in the income statement in the amount of P50,000. 5. The entity sold equipment costing P265,000, with carrying amount of P115,000, for P95,000 cash. 6. On September 30, the entity declared and paid a P2.00 per share cash dividend to shareholders of record on August 1. 7. The entity purchased land for P425,000 cash. Required: Prepare a statement of cash flows for the current year. 569
Transcribed Image Text:Problem 17-7 (AICPA Adapted) Kenwood Company provided the following comparative statement of financial position: 2017 2016 450,000 700,000 1,200,000 1,000,000 3,165,000 ( 500,000) 165,000 1,000,000 1,050,000 1,500,000 1,050,000 850,000 730,000 Cash Accounts receivable, net of allowance Inventory Land Property, plant and equipment Accumulated depreciation 500,000 1,050,000 1,300,000 1,625,000 2,900,000 ( 450,000) 150,000 1,350,000 Patent Accounts payable Accrued expenses Bonds payable Share capital, P5 par Share premium Retained earnings 1,300,000 1,000,000 1,250,000 1,165,000 1,010,000 Additional data 1. The net income for the current year was P1,095,000. 2. On February 2, the entity issued a 10% stock dividend to shareholders of record on January 15. The market price per share was P15. 3. On March 1, the entity issued 19,000 shares for land. The land had a fair value of P200,000. 4. The entity purchased long term bonds with face of P500,000. A gain on retirement of bonds was reported in the income statement in the amount of P50,000. 5. The entity sold equipment costing P265,000, with carrying amount of P115,000, for P95,000 cash. 6. On September 30, the entity declared and paid a P2.00 per share cash dividend to shareholders of record on August 1. 7. The entity purchased land for P425,000 cash. Required: Prepare a statement of cash flows for the current year. 569
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