Problem I. In connection with your audit of JZ Inc. for the year ended December 31,2007, the following financial information were presented: JZ Inc. Statement of Financial Position December 31,2007 and 2006 ASSETS Cash and cash equivalents Accounts receivable Inventory Available for sale securities PPE (net of Acc. Dep. of P75,000 and P90,000 as of 2007 P 45,000 75,000 30,000 285,000 2006 P 15,000 37,500 22,500 285,000 Dec. 31,2007 and 2006, respectively) Intangible asset, net Total Assets 105,000 15,000 P 555.000 247,500 22,500 P 630,000 LIABILITIES Accounts payable Income taxes payable Deferred taxes payable Total Liabilities P 75,000 30,000 45.000 P 150,000 P 187,500 15,000 30,000 P 232,500 SHAREHOLDER'S EQUITY Share capital Retained earnings Total shareholder's equity Total liabilities and shareholder's equity P 97,500 307,500 P 405.000 P 555,000 P 97,500 300,000 P 397.500 P 630,000 JZ Inc. Income Statement For the year ended December 31,2007 Sales Cost of sales P 450,000 Gross profit Administrative and selling expenses Interest expense Depreciation of PPE Amortization of Intangible asset Dividend income Net income before income taxes (150,000) 300,000 (30,000) (30,000) (30,000) (7,500) 45,000 247,500 (60.000) P 187.500 Income tax expense Net income Additional Information: a. The company pays salaries and other employees dues before the end of each month. All administration and selling expenses incurred were paid before December 31,2007. b. Dividend income comprised dividends received from available for sale securities. This was received before December 31,2007. Dividends received were dlassified under investing activities in last year's cash flow statement. c. Equipment with a carrying amount P112,500 and cost of P157,500 was sold for P112,500. d. The company declared and paid dividends of P180,000 to its shareholders during 2007.
Problem I. In connection with your audit of JZ Inc. for the year ended December 31,2007, the following financial information were presented: JZ Inc. Statement of Financial Position December 31,2007 and 2006 ASSETS Cash and cash equivalents Accounts receivable Inventory Available for sale securities PPE (net of Acc. Dep. of P75,000 and P90,000 as of 2007 P 45,000 75,000 30,000 285,000 2006 P 15,000 37,500 22,500 285,000 Dec. 31,2007 and 2006, respectively) Intangible asset, net Total Assets 105,000 15,000 P 555.000 247,500 22,500 P 630,000 LIABILITIES Accounts payable Income taxes payable Deferred taxes payable Total Liabilities P 75,000 30,000 45.000 P 150,000 P 187,500 15,000 30,000 P 232,500 SHAREHOLDER'S EQUITY Share capital Retained earnings Total shareholder's equity Total liabilities and shareholder's equity P 97,500 307,500 P 405.000 P 555,000 P 97,500 300,000 P 397.500 P 630,000 JZ Inc. Income Statement For the year ended December 31,2007 Sales Cost of sales P 450,000 Gross profit Administrative and selling expenses Interest expense Depreciation of PPE Amortization of Intangible asset Dividend income Net income before income taxes (150,000) 300,000 (30,000) (30,000) (30,000) (7,500) 45,000 247,500 (60.000) P 187.500 Income tax expense Net income Additional Information: a. The company pays salaries and other employees dues before the end of each month. All administration and selling expenses incurred were paid before December 31,2007. b. Dividend income comprised dividends received from available for sale securities. This was received before December 31,2007. Dividends received were dlassified under investing activities in last year's cash flow statement. c. Equipment with a carrying amount P112,500 and cost of P157,500 was sold for P112,500. d. The company declared and paid dividends of P180,000 to its shareholders during 2007.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem I. In connection with your audit of JZ Inc. for the year ended December 31,2007, the following financial
information were presented:
JZ Inc.
Statement of Financial Position
December 31,2007 and 2006
ASSETS
Cash and cash equivalents
Accounts receivable
2007
P 45,000
75,000
30,000
285,000
2006
P 15,000
37,500
22,500
285,000
Inventory
Available for sale securities
PPE (net of Acc. Dep. of P75,000 and P90,000 as of
Dec. 31,2007 and 2006, respectively)
Intangible asset, net
Total Assets
105,000
15,000
P 555,000
247,500
22,500
P 630,000
LIABILITIES
Accounts payable
Income taxes payable
Deferred taxes payable
Total Liabilities
P 75,000
30,000
45,000
P 150,000
P 187,500
15,000
30,000
P 232,500
SHAREHOLDER'S EQUITY
Share capital
Retained earnings
Total shareholder's equity
Total liabilities and shareholder's equity
P 97,500
307,500
P 405.000
P 555,000
P 97,500
300,000
P 397.500
P 630,000
JZ Inc.
Income Statement
For the year ended December 31,2007
Sales
Cost of sales
Gross profit
Administrative and selling expenses
Interest expense
Depreciation of PPE
Amortization of Intangible asset
Dividend income
Net income before income taxes
P 450,000
(150,000)
300,000
(30,000)
(30,000)
(30,000)
(7,500)
45,000
247,500
_(60.000)
P 187.500
Income tax expense
Net income
Additional Information:
a. The company pays salaries and other employees dues before the end of each month. All administration
and selling expenses incurred were paid before December 31,2007.
b. Dividend income comprised dividends received from available for sale securities. This was received before
December 31,2007. Dividends received were classified under investing activities in last year's cash flow
statement.
c. Equipment with a carrying amount P112,500 and cost of P157,500 was sold for P112,500.
d. The company declared and paid dividends of P180,000 to its shareholders during 2007.
Transcribed Image Text:Required: Based on the result of your audit, determine the following:
_11. Cash collections from customers
a. 450,000
c. 487,500
b. 412,500
d. 367,500
_12. Cash paid to suppliers and employees
b. 330,000
c. 300,000
a. 270,000
d. 450,000
_13. Cash paid for income taxes
a. 30,000
c. 45,000
d. 90,000
b. 75,000
_14. Net cash provided by operating expenses
b. 37,500
a. 82,500
c. 52,500
d. Zero
_15. Net cash used in investing and financing activities
b. 67,500
c. 52,500
d. zero
a. 22,500
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