De Leons Company Comparative Balance Sheet December 31, 2022 and 2021
Question:
De Leon’s 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 Leon’s 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.
- Prepare a statement of cash flows using direct method of reporting cash flows from operating activities
Expert Answer:
De Leons Company Statement of Cash Flows Direct Method For the Year Ended December 31 2022 Cash Flows from Operating Activities Cash receipts from customers Not directly available but can be calculated Less Cash payments to suppliers and employees Not directly available but can be calculated Cost of merchandise sold assumed paid in cash 710000 Operating expenses assumed paid in cash 226500 Net cash provided by operating activities Cash Flows from Investing Activities Sale of land 15000 Proceeds from issuance of mortgage note 40000 Purchase of building 115000 Negative value indicates cash used Gain on sale of investment 11000 Positive value indicates cash inflow Net cash flow from investing activities Cash Flows from Financing Activities Issuance of common stock 100000 2500 shares 40 Payment of bonds payable 250000 Negative value indicates cash used Payment of cash dividends 74670 Negative value indicates cash used Net cash flow from financing activities Net Increase Decrease in Cash Reconciliation of Net Income to Net Cash Flow ... View the full answer
