Question
Problem -1: Carsal Company provided the following information for the preparation of a statement of cash flows for the current year: Carsal Company Balance Sheet
Problem -1: Carsal Company provided the following information for the preparation of a statement
of cash flows for the current year:
Carsal Company
Balance Sheet
December 31, 2018
2018 2017
Assets
Cash and cash equivalents 47,500 24,300
Accounts receivable 21,500 26,000
Prepaid Insurance 2,500 1,800
Inventory 48,000 45,500
Land 20,000 10,000
Plant assets 230,000 190,000
Accumulated Depreciation (85,500) (71,100)
Total assets 284,000 226,500
Liabilities and Equity
Liabilities:
Accounts payable 17,200 19,000
Salaries Payable 1,900 1,500
Notes Payable 85,000 75,000
Total Liabilities 104,100 95,500
Equity:
Common Stock 115,000 70,000
Retained Earnings 64,900 61,000
Total Equity 179,900 131,000
Total Liabilities and Equity 284,000 226,500
Carsal Company
Income Statement
For the year ended December 31, 2018
Sales Revenue 238,000
Cost of Goods Sold (153,000)
Gross Profit 85,000
Operating Expenses:
Depreciation Expense 14,400
Insurance Expense 12,000
Salaries Expense 42,600
Other Operating Expenses 11,100
Total Operating Expenses (80,100)
Operating Income 4,900
Other Revenue and (Expenses):
Gain on Sale of Land 4,800
Interest Expense (3,500)
Total Other Revenue and Expenses 1,300
Income Before Income Tax 6,200
Income Tax Expense (1,860)
Net Income 4,340
Additional Information:
1. Carsal Company sold land with an original cost of P10,000, for 14,800 cash.
2. Anew parcel of land was purchased for P20,000, in exchange for a note payable.
3. Plant assets were purchased for P40,000 CASH.
4. Carsal Company declared and paid a P440 cash dividend to shareholders.
5. Carsal issued common stock in exchange for P45,000 cash.
Requirement: Prepare a statement of cash flows for the year ended December 31, 2018 using the indirect method (30 points)
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