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Problem 17-12 (AICPA Adapted) Moon Company reported net income of P5,000,000 for the current year. Depreciation expense was P1,900,000. The following working capital accounts changed: Accounts receivable Nontrading equity investment Inventory 1, 100,000 increase Nontrade note payable 1,600,000 increase Accounts payable 730,000 increase 1, 500,000 increase 1,220,000 increase Under the indirect method, what net amount of adjustments is required to reconcile net income to net cash provided by operating activities? a. 4,950,000 1,050,000 1,290,000 310,000 Problem 17-13 (AICPA Adapted) Kresley Company reported net income of P750,000 for the current year. The entity provided the following account balances for the preparation of statement of cash flows for the current year: January 1 December 31 Accounts receivable 115,000 145,000 Allowance for uncollectible accounts 4,000 5,000 Prepaid rent expense 62,000 41,000 Accounts payable 97,000 112,000 What is the net cash provided by operating activities for the current year? 727,000 743,000 755,000 . 757,000 425Problem 17-22 (IAA) Riverside Company provided the following data for the Prob current year: Karr * Purchased a building for P1,200,000. curre accour Paid P400,000 and signed a mortgage with the seller for Equip the remaining P800,000. Accum Note p * Executed a debt-equity swap and replaced a P600,000 loan * by giving the lender ordinary shares worth P600,000 on the date the swap was executed. Q 3 0 * * Purchased land for P1,000,000. Paid P350,000 and issued ordinary shares worth P650,000. . Borrowed P550,000 under a long-term loan agreement. Used the cash from the loan proceeds to purchase additional inventory P150,000, to pay cash dividend P300,000 and to increase the cash balance P100,000. 1. What amount should be reported as net cash used in investing activities? a. 1,200,000 b. 2,200,000 400,000 750,000 2. What amount should be reported as net cash provided by financing activities? a. 350,000 b. 850,000 250,000 d. 550,000Problem 16-16 (PHILCPA Adapted) Malampaya Company showed income before income tax of P6,500,000 on December 31, 2019. The year-end verification of the transactions revealed the following errors: * P1,000,000 worth of merchandise was purchased in 2019 and included in the ending inventory. However, the purchase was recorded only in 2020. A merchandise shipment valued at P1, 500,000 was properly recorded as purchase at year-end. Since the merchandise was still at the port area, it was inadvertently omitted from the inventory on December 31, 2019. * Advertising for December 2019, amounting to P500,000, was recorded when payment was made in January 2020. * Rent of P300,000 on an equipment applicable for six months was received on November 1, 2019. The entire amount was reported as income upon receipt. * Insurance premium covering the period from July 1, 2019 to July 1, 2020 amounting to P200,000 was paid and recorded as expense on July 31, 2019. The entity did not make any adjustment at the end of the year. What is the corrected income before tax for 2019? a. 6,900,000 b. 6,400,000 C. 6,500,000 d. 6,300,00011:42 PM Problem 17-23 (AICPA Adapted) Karr Company reported net income of P3,000,000 for the accounts: current year. The following changes occurred in several Equipment Accumulated depreciation 250,000 increase Note payable 400,000 increase 300,000 increase * During the year, the entity sold equipment costing P250,000, P50,000. with accumulated depreciation of P120,000 at a gain of In December, the entity purchased equipment costing P500,000 with P200,000 cash and a 12% note payable of P300,Q00. 1. What is the depreciation expense for the year? 520,000 b. 400,000 280,000 d. 120,000 2. What amount should be reported as net cash used in investing activities? 350,000 120,000 220,000 20,000 3. What amount should be reported as net cash provided by operating activities? a. 3,400,000 b. 3,470,000 C. 3,520,000 d. 3,570,000 431Problem 17-18 (IAA) year-end: Stone Company provided the following information at 2019 2018 Mat Accounts receivable 620,000 Inventory 680,000 curr Accounts payable 1,960,000 380,000 1,840,000 520,000 Pur Accrued expenses 500,000 Pur 340,000 The income statement for the current year showed: Pur Sale Net income Depreciation 2, 120,000 240,000 Buy Amortization of patent Gain on sale of land 80,000 200,000 Wh rep What amount should be reported as net cash provided by operating activities? 2,200,000 2,400,000 2,440,000 2,600,000 Problem 17-19 (IAA) 2 Brown Company reported the following information for the current year: Bor Sales Cost of goods sold 2,800,000 1,000.000 Ret Distribution costs 400.000 Administrative expenses 350,000 Bo Depreciation 250.000 bor Interest expense 80,000 Income tax expense 280,000 ac All sales were made for cash and all expenses other than depreciation and bond premium amortization of P20,000 were paid in cash. All current assets and current liabilities remained the unchanged. What is the net cash provided by operating activities for the current year? 440,000 690,000 670,000 710,000 428Problem 17-14 (AICPA Adapted) Kentucky Company reported net income of P1,500,000 for the Pro current year. Black The entity provided the following changes in several accounts during the current year: Acco Investment in Videogold Company shares carried Inver on the equity basis 55,000 increase Acco Accumulated depreciation, caused by major Prep repair to project equipment 21,000 decrease Premium on bonds payable 14,000 decrease Deferred tax liability 18,000 increase In the statement of cash flows, what is the net cash provided by operating activities? The 1,504,000 b. 1,483,000 Cash C. 1,449,000 Cash d. 1,428,000 Cash Wha Problem 17-15 (IAA) Albay Company provided the following information: Accounts receivable, January 1, net of allowance of P100,000 Accounts receivable, December 31, net of allowance 1,200,000 of P300,000 1,600,000 Run Sales for the current year - all on credit Uncollectible accounts written off during the year 8,000,000 Recovery of accounts written off 70,000 Bad debt expense for the year 20,000 Capi Fina Cash expenses for the year 250,000 Inco Net income for the year 5,250,000 Divi 2,500,000 Net What is the net cash flow from operating activities? Wh disc 2,100,000 the 2,350,000 2,080,000 d. 2, 150,000 426Problem 17-10 (IAA) Seawall Company provided the following data for the preparation of the statement of cash flows for the current Pro year: Moo Dividends declared and paid 800,000 curr Cash flow from investing activities Cash flow from financing activities (2,500,000) ( 800,000) The December 31 January 1 Acco Cash 2, 100,000 1,200,000 Nont Other assets 21,000,000 22, 700,000 Inve Nont Liabilities 10,500,000 2,000,000 11,700,000 Acco Share capital 10,600,000 2,000,000 Retained earnings 10,200,000 Und oper activities? What amount should be reported as cash flow from operating 4,200,000 2,400,000 4,500,000 . 5,400,000 Problem 17-11 (IAA) Kre Santana Company provided the following information for the curr current year: December 31 The January 1 prep Cash Retained earnings 1,500,000 1,000,000 Cash flow from operating activities 7,000,000 5,400,000 Cash flow from investing activities Acco (4,800,000) Allo Cash flow from financing activities 1,800,000 Prep Dividends declared and paid 2,000,000 Acc Net income 3,600,000 Wh What amount should be reported as cash flow from operating cur activities? 3,500,000 2,500,000 4,500,000 3,600,000 424Problem 17-8 (AICPA Adapted) On December 31, 2019, Kale Company had the following balances in the bank accounts with First Bank: Checking account #101 Checking account #201 Time deposit 1,750,000 ( 100,000) Commercial papers 250,000 90-day treasury bill, due February 28, 2020 1,000,000 180-day treasury bill, due March 15, 2020 500,000 800,000 On December 31, 2019, what amount should be reported as cash and cash equivalents? 3,400,000 2,000,000 2,400,000 d. 3,200,000 Problem 1679 (IAA) Oakwood Company provided the following data for the current year: Cash balance, beginning of year 1,300,000 Cash flow from financing activities 1,000,000 Total shareholders' equity, end of year 2,300,000 Cash flow from operating activities 400,000 Cash flow from investing activities (1,500,000) Total shareholders' equity, beginning of year 2,000,000 What is the cash balance at the end of current year? a. 1,200,000 b. 1,600,000 c. 1,400,000 d. 1,700,000.(AICPA Adapted) Taal Company revealed the following errors in the financial statements: December 31, 2018 inventory overstated December 31, 2019 inventory understated 35,000 Depreciation for 2018 overstated 10,000 Depreciation for 2019 understated 25,000 December 31, 2018 prepaid insurance understated 8,000 December 31, 2019 unearned rent income overstated 5,000 December 31, 2019 accrued salaries understated 4,000 20,000 1. What is the effect of the errors on net income for 2018? a. 10,000 understated b. 10,000 overstated C. d. 5,000 understated 5,000 overstated 2. What is the effect of the errors on net income for 2019? a. 16,000 understated b. 16,000 overstated c. 12,000 understated d. 12,000 overstated 3. What is the effect of the errors on retained earnings on December 31, 2019? a. 11,000 understated b. 11,000 overstated c. 16,000 understated d. 16,000 overstated 4. What is the effect of the errors on working capital on December 31, 2019? a. 24,000 understated b. 24,000 overstated C. 6,000 understated d. 6,000 overstatedProblem 16-14 (AICPA Adapted) Emma Company revealed the following errors in the financial statements: December 31, 2018 inventory understated 500,000 December 31, 2019 inventory overstated 800,000 Depreciation for 2018 overstated 250,000 December 31, 2019 accrued rent income overstated 300,000 December 31, 2019 accrued salaries understated 150,000 The understatement of the 2018 ending inventory pertains to goods in transit purchased FOB shipping point which were not recorded in 2018 but paid in 2019. On December 31, 2019, fully depreciated machinery was sold for P100,000 cash but the sale was not recorded until 2020. 1. What is the effect of the errors on net income for 2018? a. 250,000 understated b. 250,000 overstated C. 500,000 understated d. 2. What is the effect of the errors on net income for 2019? a. 1, 150,000 understated b. 1, 150,000 overstated c. 1,250,000 understated d. 1,250,000 overstated 3. What is the effect of the errors on retained earnings on December 31, 2019? a. 1, 150,000 understated b. 1, 150,000 overstated C . 900,000 understated d. 900,000 overstated 382Problem 17-20 (IFRS) Matthew Company provided the following information for the current year: Purchase of inventory Purchase of land, with the vendor financing P1,000,000 for 2 years 1,950,000 Purchase of plant for cash Sale of plant: 3, 500,000 2, 500,000 Carrying amount Cash proceeds 500,000 Buyback of ordinary shares 400,000 700,000 What amount of investing net cash outflows should be reported in the statement of cash flows for the current year? 5,600,000 4,600,000 6,550,000 d. 5,300,000 Problem 17-21 (IFRS) Nellie Company provided the following information at the end of each year: 2019 2018 Borrowings 2, 500,000 800,000 Share capital 3,500,000 2,000,000 Retained earnings 950,000 750,000 Borrowings of P300,000 were repaid during 2019 and new borrowings include P200,000 vendor financing arising on the acquisition of a property. The movement in retained earnings comprised profit for 2019 of P900,000, net of dividends of P700,000. The movement in share capital arose from issuance of share capital for cash during the year. What amount should be reported as financing net cash inflows for the current year? CO 2,400,000 b. 2,200,000 c. 2,500,000 d. 2,300,000 429Problem 17-16 (IAA) Blacktown Company reported the following account balances: Accounts payable December 31 January 1 "Inventory 500,000 Accounts receivable 300,000 650,000 Prepaid expenses 800,000 250,000 900,000 * 400,000 600,000 * All purchases of inventory were on account. * Depreciation expense of P900,000 was recognized. Equipment was sold during the year and a gain of P300,000 was recognized. The entity provided the following cash flow information: Cash collected from customers Cash paid for inventory tribest 9,500,000 Cash paid for other expenses (4,100,000) Cash flow from operations (1,400,000) 4,000,000 What is the net income for the current year? 3,300,000 b. 3,400,000 c. 3,000,000 d. 3,900,000 Problem 17-17 (AICPA Adapted) Rumulus Company reported the following information in the financial statements for the current year: Capital expenditures 1,000,000 Finance lease payments 125,000 325,000 Income taxes paid 200,000 Dividends paid 220,000 Net interest payments What total amount should be reported as supplemental disclosures in the statement of cash flows prepared using the indirect method? . 1, 125,000 1,870,000 545,000 745,000 427
