Construct a Statement of Cash Flow with the following given:

The statement of financial position of Ayala Trading as of December 31, 2022 shows the following account balances:

Cash 93,000
Accounts receivable - 165,000
Allowance for doubtful accounts - 2,000
Notes receivable (trade) - 45,000
Merchandise inventory - 105,000
Prepaid operating expenses - 6,000
Accrued commission revenue - 12,000
Furniture and equipment - 240,000
Accumulated depreciation - furniture and equipment - 40,000
Accounts payable - 93,000
Accrued operating expenses - 9,700
Unearned interest revenue - 300
Share capital - 500,000

Cash transactions during 2023 are summarized below:
Cash sales - 351,100
Collections from customers after deducting P3,600 sales discounts - 623,000
Collections on trade notes receivable - 60,000
Receipt of cash upon issuance of a 60-day, 12% note to the bank - 30,000
Collections of interest revenue - 400
Collections of commission revenue - 45,000
Refund for purchase returns - 2,000
Cash purchases - 103,000
Payments to creditors after deducting P5,100 purchase discounts - 506,000
Acquisition of new furniture - 6,000
Payments of operating expenses - 275,000

Other transactions during 2023 are as follows:

Worthless accounts receivable written off against the existing allowance - 1,500
Sales returns and allowances credited against the accounts receivable - 2,000
Purchase returns and allowances debited against accounts payable - 1,000

Additional information gathered from various records and other business documents reveals the assets and liabilities of Ayala Trading as of December 31, 2023:
Cash?
Accounts receivable - 155,000
Allowance for doubtful accounts - 2,500
Merchandise Inventory - 124,000
Prepaid operating expenses - 6,800
Accrued commission revenue - 5,000
Furniture and equipment - 246,000
Accumulated depreciation - furniture and equipment - 65,000
Accounts payable - 86,000
Notes payable - 30,000
Accrued interest expense - 200
Accrued operating expenses - 8,500

Answer rating: 100% (QA)

To construct the Statement of Cash Flows for Ayala Trading for the year ended December 31 2023 we will follow the indirect method Well start with the changes in each account from the statement of fina... View the full answer