FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Sample Problem: Use the following data to construct a statement of cash flows using the direct and indirect

methods.

2020

2019

Cash

P4,000

P14,000

Accounts receivable

25,000

32,500

Prepaid insurance

5,000

7,000

Inventory

37,000

34,000

Fixed assets

316,000

270,000

Accumulated Depreciation

Total assets

Accounts payable

P18,000

P16,000

Wages payable

4,000

7,000

Note payable

173,000

160,000

Capital stock

88,000

84,000

Retained earnings

Total Liabilities & Equity

Sales

Cost of goods sold

(123,000)

Depreciation expense

(15,000)

Insurance expense

(11,000)

Wage Expense

Net Income

During 2020 declared and paid dividends of P2,500 During 2020, ABC paid P46,000 in cash to acquire new fixed assets.  The accounts payable was used only for inventory.  No debt was retired during 2020. Prepare Statement of Cash Flow using;

 

  1. Direct Method
  2. Indirect Method
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