PROBLEM 1 BHEVERLYNN CORPORATION STATEMENTS OF FINANCIAL POSITION AS AT MARCH 31,2021 AND 2020 (in peso) 2021 2020 ASSETS Noncurrent Assets Property, Plant and equipment 1,125,000 742,000 Intangible assets 320,000 150,000 Financial asset at amortized cost 289,600 294,000 Investment in associate 144,000 120,000 Total noncurrent Assets 1,878,600 1,306,000 Current Assets Inventories 390,000 237,000 Prepaid expenses 23,000 15,000 Trade receivables 284,000 319,000 Financial assets at fair value through profit or loss (FVPL) 175,000 325,000 Temporary investments 148,000 46,000 Cash 54,000 102,000 Total current assets 1,074,000 1,044,000 TOTAL ASSETS 2,952,600 2,350,000 EQUITY AND LIABILITIES Equity Share capital – P1 ordinary shares 550,000 400,000 Share premium 300,000 100,000 Revaluation surplus 130,000 60,000 Retained earnings 321,000 264,000 Retained earnings appropriated 250,000 100,000 Treasury shares (17,500) (25,000) Total equity 1,533,600 899,000 Noncurrent Liabilities Long-term loans 175,000 295,000 Bonds payable 378,000 329,000 Finance lease liabilities 100,000 80,000 Deferred tax liability – net 78,000 65,000 Total noncurrent liabilities 731,000 769,000 Current Liabilities Trade payables 264,000 348,000 Unearned revenue 15,000 41,000 Accrued expenses 113,000 56,000 Interest payable 16,000 4,000 Income tax payable 56,000 123,000 Finance lease liabilities 17,000 12,000 Short-term loans 138,000 98,000 Notes payable – non-trade 69,000 - Total current liabilities 688,000 682,000 TOTAL EQUITY AND LIABILITIES 2,952,600 2,350,000 BHEVERLYNN CORPORATION STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED MARCH 31, 2021 (in pesos) 2021 REVENUE 1,771,200 COST OF SALES (989,300) GROSS PROFIT 781,900 OPERATING EXPENSES (237,100) FINANCE COSTS (60,000) OTHER INCOME (EXPENSES) - NET 108,200 INCOME BEFORE INCOME TAX 593,000 INCOME TAX EXPENSE (136,900) NET INCOME 456,100 OTHER COMPREHENSIVE INCOME: Gain on revaluation of property, plant, and equipment 70,000 TOTAL COMPREHENSIVE INCOME 526,100 Notes: a) During 2021, items of property, plant and equipment with a carrying amount of P103,000 were sold for P110,000. Profit on sale was included in other income (expenses) - net. Depreciation charged in the year on property, plant and equipment totaled P57,000. Bheverlynn purchased P56,000 of property, plant and equipment by means of finance leases, payments being made in arrears on the last day of each accounting period. At the fiscal year-end, a six-month note payable for P69,000 was issued toward the purchase of a new property, plant and equipment. b) During 2021, amortization of P60,000 was charged on intangible assets. c) The ending balance of Allowance for asset impairment - Receivables is P21,000 and P43,000 as of March 31, 2021 and 2020, respectively. The ending balance of Allowance for asset impairment - Inventory is P59,000 and P18,000 as of March 31, 2021 and 2020, respectively. Movements in allowance for asset impairment is included in Operating expenses of provisions or in Other income (expenses) - net for reversals. d) There were no acquisitions nor disposals of financial asset at amortized cost. Bheverlynn earned interest income of P29,200 from this investment. e) The share in profit of associate for the current year is P40,000. Bheverlynn received dividends of P16,000 from its investment in associate. f) During the year, a financial asset at FVPL that had a carrying amount of P100,000 was sold for P140,000. No financial assets at FVPL were purchased for during the year. Dividends of P20,000 were received from this type of investment. The financial assets at FVPL are not held for trading. Any unrealized gains (losses) recognized is included in Other income (expenses) net. g) The temporary investments are government bonds and management has decided to classify them as cash equivalents, in accordance with PAS 7 Statement of Cash Flows. h) During the year Bheverlynn made a 1 for 5 bonus issue, capitalizing its retained earnings, followed by a rights issue. i) During 2021, treasury shares were sold for P5,000 more than their cost. J) New bonds were issued on April 1, 2020 at face value. The discount on bonds payable is P12,000 and P21,000 on March 31, 2021 and 2020, respectively. k) The accretion expense on finance lease liabilities amounted to P3,000 and the amortization of bond discount are included in Finance costs. I) The deferred tax liability-net includes the tax effect on the current year revaluation increment amounting to P30,000. m) Bheverlynn observes the following in preparing its statement of cash flows: interest and dividends paid are presented under financing activities, while interest and dividends received are presented under investing activities. Required: 1. Prepare a statement of cash flows for Bheverlynn Corporation in accordance with PAS 7 using the indirect method. 2. Provide a brief narrative on the noncash transactions that will be shown in the "Notes to Statement of Cash Flows"
PROBLEM 1
BHEVERLYNN CORPORATION
STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31,2021 AND 2020 (in peso)
2021 2020
ASSETS
Noncurrent Assets
Property, Plant and equipment 1,125,000 742,000
Intangible assets 320,000 150,000
Financial asset at amortized cost 289,600 294,000
Investment in associate 144,000 120,000
Total noncurrent Assets 1,878,600 1,306,000
Current Assets
Inventories 390,000 237,000
Prepaid expenses 23,000 15,000
Trade receivables 284,000 319,000
Financial assets at fair value through profit or loss (FVPL) 175,000 325,000
Temporary investments 148,000 46,000
Cash 54,000 102,000
Total current assets 1,074,000 1,044,000
TOTAL ASSETS 2,952,600 2,350,000
EQUITY AND LIABILITIES
Equity
Share capital – P1 ordinary shares 550,000 400,000
Share premium 300,000 100,000
Revaluation surplus 130,000 60,000
Retained earnings appropriated 250,000 100,000
Treasury shares (17,500) (25,000)
Total equity 1,533,600 899,000
Noncurrent Liabilities
Long-term loans 175,000 295,000
Bonds payable 378,000 329,000
Finance lease liabilities 100,000 80,000
Total noncurrent liabilities 731,000 769,000
Current Liabilities
Trade payables 264,000 348,000
Unearned revenue 15,000 41,000
Accrued expenses 113,000 56,000
Interest payable 16,000 4,000
Income tax payable 56,000 123,000
Finance lease liabilities 17,000 12,000
Short-term loans 138,000 98,000
Notes payable – non-trade 69,000 -
Total current liabilities 688,000 682,000
TOTAL EQUITY AND LIABILITIES 2,952,600 2,350,000
BHEVERLYNN CORPORATION
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED MARCH 31, 2021 (in pesos)
2021
REVENUE 1,771,200
COST OF SALES (989,300)
GROSS PROFIT 781,900
OPERATING EXPENSES (237,100)
FINANCE COSTS (60,000)
OTHER INCOME (EXPENSES) - NET 108,200
INCOME BEFORE INCOME TAX 593,000
INCOME TAX EXPENSE (136,900)
NET INCOME 456,100
OTHER COMPREHENSIVE INCOME:
Gain on revaluation of property, plant, and equipment 70,000
TOTAL COMPREHENSIVE INCOME 526,100
Notes:
a) During 2021, items of property, plant and equipment with a carrying amount of P103,000 were sold for P110,000. Profit on sale was included in other income (expenses) - net.
b) During 2021, amortization of P60,000 was charged on intangible assets.
c) The ending balance of Allowance for asset impairment - Receivables is P21,000 and P43,000 as of March 31, 2021 and 2020, respectively. The ending balance of Allowance for asset impairment - Inventory is P59,000 and P18,000 as of March 31, 2021 and 2020, respectively. Movements in allowance for asset impairment is included in Operating expenses of provisions or in Other income (expenses) - net for reversals.
d) There were no acquisitions nor disposals of financial asset at amortized cost. Bheverlynn earned interest income of P29,200 from this investment.
e) The share in profit of associate for the current year is P40,000. Bheverlynn received dividends of P16,000 from its investment in associate.
f) During the year, a financial asset at FVPL that had a carrying amount of P100,000 was sold for P140,000. No financial assets at FVPL were purchased for during the year. Dividends of P20,000 were received from this type of investment. The financial assets at FVPL are not held for trading. Any unrealized gains (losses) recognized is included in Other income (expenses) net.
g) The temporary investments are government bonds and management has decided to classify them as cash equivalents, in accordance with PAS 7 Statement of
h) During the year Bheverlynn made a 1 for 5 bonus issue, capitalizing its retained earnings, followed by a rights issue.
i) During 2021, treasury shares were sold for P5,000 more than their cost.
J) New bonds were issued on April 1, 2020 at face value. The discount on bonds payable is P12,000 and P21,000 on March 31, 2021 and 2020, respectively.
k) The accretion expense on finance lease liabilities amounted to P3,000 and the amortization of bond discount are included in Finance costs.
I) The deferred tax liability-net includes the tax effect on the current year revaluation increment amounting to P30,000.
m) Bheverlynn observes the following in preparing its statement of cash flows: interest and dividends paid are presented under financing activities, while interest and dividends received are presented under investing activities.
Required:
1. Prepare a statement of cash flows for Bheverlynn Corporation in accordance with PAS 7 using the indirect method.
2. Provide a brief narrative on the noncash transactions that will be shown in the "Notes to Statement of Cash Flows"
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