Statement of Cash Flows

Class Activity No. 6

Problem 1

Silver Corporation provides the following account balances for 2021 and 2022:

12/31/2022 12/31/2021
Accounts receivable P70,600 P62,400
Inventory 148,200 158,600
Accounts payable 39,000 51,000
Short-term notes payable 41,600 40,000
Sales 616,600
Cost of goods sold 490,000
Depreciation expense 18,200
Amortization expense 2,600
Other expenses 56,000
Loss on sale of building 3,000
Gain on sale of investment 13,000

Requirement: Prepare the operating activities section of the statement of cash flows under:
a. Direct method
b. Indirect method

Problem 2

Partial balance sheet data and additional information for Delloite Industries are given below:

Delloite Industries
Comparative Balance Sheet
December 31, 2022 and 2021

Assets 2022 2021

Land, buildings and equipment P325,000 P200,000
Accum. Depreciation- buildings and equipment (75,000) (50,000)
Equities:
Common stock (P25 par) 300,000 200,000
Additional paid in capital 40,000 0
Retained earnings 30,000 20,000

Additional information:
 June 15, 2022 – issued 4,000 shares of common stock for cash.
 July 1, 2022 – purchased new equipment for cash.
 December 31, 2022 – paid cash dividends of P40,000.

Requirement: Prepare the investing and financing activities sections of the statement of cash
flows for the year ending December 31, 2022
Problem 3

The following is a comparative balance sheet of Covey Corporation for December 31, 2022 and
2021:

12/31/2022 12/31/2021
Cash and cash equivalents P250,000 P220,000
Accounts receivable 327,600 356,000
Inventories 822,000 780,000
Investment in bonds (amortized cost) 0 200,000
Equipment 2,400,000 2,040,000
Accumulated depreciation (700,000) (760,000)
P3,099,600 P2,836,000

Accounts payable P359,000 P281,000

Bonds payable, due 2025 400,000
Common stock, P20 par 1,800,000 1,600,000
Paid-in capital in excess of par 280,000 200,000
Retained earnings 660,600 355,000
P3,099,600 P2,836,000

Additional information:
 Net income for 2022, P545,600.
 Depreciation reported on income statement, P140,000.
 Fully depreciated equipment, no salvage value was scrapped. Equipment was purchased
for P560,000.
 Bonds of P400,000 were retired at their face value.
 10,000 shares of common stock were issued for cash at P28 per share.
 Cash dividends declared and paid, P240,000.
 Investment in bonds with carrying amount of P200,000 were sold for P300,000. The bonds
were acquired at face amount.

Requirement: Prepare a statement of cash flows for Covey Corporation for 2022, using the
indirect method.