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Cash Flow Analysis for Fearsome Company

The document outlines the cash flow statement for Fearsome Company for the year ended December 31, 2024, detailing cash flows from operating, investing, and financing activities. It highlights cash received from customers, payments to creditors, and net cash from operating activities amounting to ₱580,000. Additionally, it includes changes in accounts receivable, inventory, and accounts payable, resulting in an increase in cash and cash equivalents to ₱1,600,000.

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73 views1 page

Cash Flow Analysis for Fearsome Company

The document outlines the cash flow statement for Fearsome Company for the year ended December 31, 2024, detailing cash flows from operating, investing, and financing activities. It highlights cash received from customers, payments to creditors, and net cash from operating activities amounting to ₱580,000. Additionally, it includes changes in accounts receivable, inventory, and accounts payable, resulting in an increase in cash and cash equivalents to ₱1,600,000.

Uploaded by

izzelmaelaguardia
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Problem 19-5 Problem 19-8

Fearsome Company
Direct Method: Accounts Receivable, beg ₱440,000.00 Statement of cash Flows
Cash received from customers ₱4,390,000.00 Sales ₱4,500,000.00 Year Ended December 31, 2024
Cash payment to creditors -₱2,730,000.00 Accounts Receivable, end -₱540,000.00
Salaries paid -₱630,000.00 Write off -₱10,000.00 Cash flow from operating activities:
Insurance paid -₱25,000.00 Cash received from customers ₱4,390,000.00 Operating income ₱3,050,000.00
Rent paid -₱250,000.00 Depreciation ₱400,000.00
Other expenses paid -₱100,000.00 Accounts Payable, beg ₱160,000.00 Decrease in net accounts receivable ₱100,000.00
Cash provided before income tax ₱655,000.00 Purchases ₱2,850,000.00 Increase in inventory -₱150,000.00
Income tax paid -₱75,000.00 Accounts Payable, end -₱280,000.00 Investement Income -₱200,000.00
Net cash by Operating Activities ₱580,000.00 Cash payment to creditors ₱2,730,000.00 Increase in accounts payable ₱50,000.00
Cash provided before income tax ₱3,250,000.00
Indirect Method Accrued salaries, beg ₱80,000.00 Income tax paid -₱750,000.00 ₱2,500,000.00
Operating income ₱650,000.00 Salaries expense ₱600,000.00 Cash flow from investing activities:
Increase in accounts receivable -₱80,000.00 Prepaid insurance, end -₱50,000.00 Sale of equipment ₱50,000.00
Decrease in inventory ₱150,000.00 Salaries paid ₱630,000.00 Purchase of equipment -₱1,200,000.00 -₱1,150,000.00
Increase in prepaid insurance -₱5,000.00 Cash flow from financing activities:
Increase in accounts payable ₱120,000.00 Prepaid insurance, end ₱15,000.00 Issue of share capital ₱1,500,000.00
Increase in accrued salaries payable -₱30,000.00 Insurance expense ₱20,000.00 Sale of treasury shares ₱900,000.00
Depreciation ₱50,000.00 Prepaid insurance, beg -₱10,000.00 Payment of cash dividend -₱2,500,000.00 -₱100,000.00
Gain on sale of equipment -₱200,000.00 Insurance paid ₱25,000.00 Increase in cash and cash equivalents ₱1,250,000.00
Cash provided before income tax ₱655,000.00 Add: Cash and Cash equivalents - Jan 01 ₱350,000.00
Income tax paid -₱75,000.00 Income tax ₱125,000.00 Cash and cash equivalents - Dec 31 ₱1,600,000.00
Net cash by Operating Activities ₱580,000.00 Income tax payable, beg ₱100,000.00
Income tax payable, end -₱150,000.00 Accumulated Depreciation - 2024 ₱1,050,000.00
Income tax paid ₱75,000.00 Sale of Equipment (200k - 50k) ₱150,000.00
Accumulated Depreciation - 2023 -₱800,000.00
Accounts Receivable, end ₱540,000.00 ₱400,000.00
Accounts Receivable, beg ₱440,000.00
Increase in allowance (40k- 20k) ₱20,000.00
Increase in accounts receivable ₱80,000.00

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