ABC Company

Statement of Changes in Equity

For the year ended December 31, 20x2

Retained
Share Capital Total Equity
Earnings

Balance, Jan. 1, 20x2 P300,000 P103,000 P403,000

Changes in equity for

20x2

Dividends -30,000 -30,000

Total Comprehensive
- 7,000 7,000
income

Balance, Dec. 31,

P300,000 P80,000 P380,000
20x2

ABC Company
Statement of Cash Flows
For the year ended December 31, 20x2

Cash flow from operating activities

Profit before taxation P10,000

Adjustments for:
Depreciation expense 50,000
60,000
Increase in Accounts Receivable, net -5,000
Increase in Inventory -10,000
Decrease in Accounts Payable -27,000
Cash Generated from Operations 18,000
Income taxed paid -3,000
Net cash from operating activities 15,000
Cash flows from investing activities:
Cash flows from financing activities:
Proceeds from long-term borrowings 20,000
Dividends paid -30,000
Net cash used in financing activities -10,000
Net increase in cash 5,000
 Cash at beginning of period 15,000
Cash at end of period P20,000

Additional Information:
·         The land and building were acquired on April 1, 20x0
·         The share capital was issued on March 1, 20x0
·         Sale, purchases and expenses (except interest expense) were incurred evenly during the year.
·         Interest expense was recognized and paid on December 31, 20x2
·         Dividends of P30,000 were declared and paid on December 31, 20x2
·         Selected values of general price indices(CPI) are shown below:
March 1, 20x0 ###
April 1, 20x0 ###
Average for 20x1 ###
December 31, 20x1 ###
Average for 20x2 ###
December 31, 20x2 ###

Requirement: Prepare constant peso financial statements

Illustration 2: Gain or loss on net monetary position

ABC Co. has the following information during 20x1

Sales(all 400,000
Cash collections from customers on account made evenly throughout 20x1 220,000
Purchases(all on account) made evenly throughout 20x1 200,000
Cash payments to suppliers on account made evenly throughout 20x1 180,000
Land purchased for cash on February 1, 20x1 40,000
Equipment purchased on credit on March 1, 20x1 and paid on April 1, 20x1 30,000
Proceeds on a loan taken on July 1, 20x1 100,000
Investment in held for trading securities sold on August 1, 20x1 60,000
Cash dividends declared on October 1, 20x1 and paid on December 31, 20x1 50,000
Operating expenses paid evenly throughout 20x1 120,000
Share Capital Issued on December 31, 20x1 80,000
Partial payment on the loan on December 31, 20x1 50,000
Monetary assets:
January 1, 20x1 30,000
December 31, 20x1 200,000
Monetary liabilities:
January 1, 20x1 15,000
 December 31, 20x1 85,000

The following are selected values of CPI-U for 20x1:

1-Jan 100
1-Feb 110
1-Mar 120
1-Apr 130
1-Aug 140
1-Oct 150
31-Dec 160

Average for the year 125

Requirement: Compute for the gain or loss on net monetary position (purchasing power gain or loss)

Illustration 4: Non-monetary items carried at other than cost

ABC Co. has previously been preparing financial statements restated in accordance with PAS 29 As of December 31, 20x1, the
·         Inventory from purchases made evenly throughout 20x1 with historical cost of P100,000 and net realizable
·         Held for trading securities acquired on January 1, 20x1 for P50,000. The fair value of the securities as of ye
·         Land acquired on January 1, 20x0 for P 1,000,000 was revalued to P1,200,000 on July 1, 20x1
The following are the selected general price index numbers:
January 1, 20x0 ###
January 1, 20x1 ###
July 1, 20x1 ###
December 31, 20x1 ###

Requirement: Determine the amounts to be recognized for the assets listed above in the restated financial stat

Illustration 5: Equity-First time adoption

During 20x1, the economy of ABC Co.’s functional currency became hyperinflationary. ABC Co. is preparing its fi
Accounts
Cash 100 payable 300

Accounts Receivable 350 Share Capital 500

Prepaid Expenses 50 Revaluation 100

surplus
Retained
Land 1,000 600
earnings

Total liabilities
Total Assets 1,500 1,500
and equity

Additional information:
 ·         The prepaid expenses were recognized evenly during the year.
·         The land was acquired on January 1, 20x0 for P900 but was revalued to P 1,000 on July 1, 20
·         The share capital was issued on January 1, 20x0
·         The following are the selected general price index numbers:
January 1, 20x0 100
January 1, 20x1 120
July 1, 20x1 125
December 31, 20x1 140
Average for 20x1 130

Requirement: Compute for the restated shareholders ’equity.

urred evenly during the year.
 As of December 31, 20x1, the following are among the assets of ABC Co.:
t of P100,000 and net realizable value of P80,000 as of year-end.
value of the securities as of year-end is P60,000
00 on July 1, 20x1

ve in the restated financial statements

nary. ABC Co. is preparing its first financial statements prepared under PAS 29. The following information before restatement was made a
evalued to P 1,000 on July 1, 20x1. A revaluation surplus of P100 was recognized in equity.
efore restatement was made available: