Question
The comparative balance sheet of De Leon Company for December 31,2019 and 2020,is as follows: De Leons Company Comparative Balance Sheet December 31, 2022 and
The comparative balance sheet of De Leon Company for December 31,2019 and 2020,is as follows:
De Leons Company
Comparative Balance Sheet
December 31, 2022 and 2021
2022 2021
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 140,350 P 95,900
Accounts Receivable (Net) . . . . . . . . . . 95.300 102.300
Inventories . . . . . . . . . . . . . . . . . . . . . . . 165,200 157,900
Prepaid expenses . . . . . . . . . . . . . . . . . . 6,240 5,860
Investments (long term) . . . . . . . . . . . . . . 35,700 84,700
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000 90,000
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . 375,000 260,000
Accumulated depreciation Buildings . . . (71,300) (58,300)
Machinery and Equipment . . . . . . . . . . 428,300 428,300
Accumulated depreciation-Machinery & Eqpt . . (148,500) (138,000)
Patents . . . . . . . . . . . . . . . . . . . . . . . .. . 58,000 65,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . P 1,159,290 P1,093,660
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Liabilities and Stockholders Equity
Accounts payable (merchandise creditors) P 43,500 P 46,700
Accrued expenses payable (operating expenses) 14,000 12,500
Income taxes payable . . . . . . . . . . . . . . . . .. 7,900 8,400
Dividends payable . . . . . . . . . . . . . . . . . . . . . 14,000 10,000
Mortgage notes payable (due 2024) . . . . . . . 40,000 0
Bonds payable . . . . . . . . . . . . . . . . . . . . . . . . 150,000 250,000
Common stock (P30 par) . . . . . . . . . . . . . . . . 450,000 375,000
Excess of issue price over par-Common stock 66,250 41,250
Retained earnings . . . . . . . . . . . . . . . . . . . . . 373,640 349,810
Total Liabilities and Stockholders Equity P1,159,290 P1,093,660
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De Leons Company
Income Statement
For the year ended December 31, 2022
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 1,100,000
Cost of Merchandise sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . .. 710,000
Gross Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. P 390,000
Operating expenses:
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . P 23,500
Patent amortization . . . . . . . . . . . . . . . . . . . . . . .. . . . 7,000
Other operating expenses . . . . . . . . . . . . . . . . . . . . . 196,000
Total operating expenses . . . . . . . .. . . . . . . . . 226,500
Income from operation . . . . . . . . . . . . . . . . . . . . . . . . . . 163,500
Other income:
Gain on sale of Investment . . . . . . . . . . . . . . . . . . . 11,000
Other expenses:
Internet expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000 (15,000)
Income before Income tax P 148,500
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 98,500
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An examination of the accounting records revealed the following additional information applicable to 2022:
Land costing P15,000 was sold for P15,000.
A mortgage note was issued for P40,000.
A building costing P115,000 was constructed.
2,500 shares of common stock were issued at P40 in exchange for the bonds payable.
Cash dividends declared were P74,670.
Instructions:
Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities.
Prepare a statement of cash flows using direct method of reporting cash flows from operating activities
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