Exercise 5-9During the next fiscal year ending June 30, 2020, Texas Company will makesubstantial 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 5,000shares 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 at4. 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.7. Cash dividends will be paid to stockholders.The financial statements forccast for the year ended June 30, 2020 are givennext page: 186Income SiatementFor the Year Ended June 30, 2020Net salesP2,430,500Cost of goods sold (including depreciationof P191,500,P1,073,000Operating expenses (including depreciationof P100,600)Interest expense500,0007,500(26,000)(15,000)(44,000)356,000P1,851,500P 579,000Gain on sale of equipmentGain on sale of trading securitiesUnrealized holding gain on trading securitiesIncome taxTotalNet incomeTexas CompanyBalance SheetsJune 30Assets20202019CashP532,000275,000P442,000325,00080,500Trading Securities(market)Accounts receivable141,50086,000168,500450,00043,0001,095,000352,000P3,057,000inventoriesInvestment in Associates (cost)Land43,000Buildings (net)Equipment (net)Total assets321,500242,500P1,540,500Liabilities & EquityP 93,50050,00020,500143,000980,000550,000P107,500Accounts payableShort-term bank loans payableAccrued operating expensesIncome tax payableBonds payable (net)Common stock, P10 par valueAdditional paid in capitalRetained earningsTotal liabilities & equity50,00041,500156,500400,000820,000P3,057,000500,000250,000435 000P1,540,500REQUIRED:1. Prepare a forecast cash flow statement for the year ended June 30, 2020.2. Show supporting schedules or T-accounts for many missing amounts.

One of the most important financial statement being prepared at the year end to record and show the…

Answered: REQUIRED: I. Prepare a forecast cash…

REQUIRED: I. Prepare a forecast cash flow statement for the year ended June 30, 2020. 2 Show supporting schedules or T-accounts for many missing amounts.

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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