COMPED 321 – Exercise 3

1. Statement of Financial Position

Prepare a properly classified statement of financial position for Simple Company from the following account
balances on December 31, 2010.

Share capital 5,000,000

Share premium 500,000
Retained earnings 880,000
Serial bonds payable (P 500,000 due every July 1 of each year) 2,500,000
Employees income tax payable 20,000
Notes payable 100,000
Accrued expenses 30,000
Accrued interest on note payable 10,000
Income tax payable 60,000
Allowance for doubtful accounts 50,000
Advances from customers 100,000
Accounts receivable 500,000
Accumulated depreciation – building 1,600,000
Accumulated depreciation – machinery 1,300,000
Financial assets at amortized cost 1,500,000
Land 1,500,000
Machinery 2,000,000
Factory supplies 50,000
Notes receivable 150,000
Building 4,000,000
Cash 420,000
Claim receivable 20,000
Finished goods 400,000
Franchise 200,000
Goods in process 600,000
Prepaid insurance 20,000
Raw materials 200,000
Financial assets at fair value 250,000
Tools 40,000
Goodwill 100,000
Plant expansion fund 500,000
Accounts payable 300,000
2. Statement of Comprehensive Income

Presented below is income statement information related to Youth Company for 2010. Prepare an income
statement for the year ended December 31, 2010

Sales 9,070,000
Purchases 5,750,000
Transportation in 150,000
Inventory beginning 1,500,000
Inventory ending 1,400,000
Uninsured flood loss 340,000
Officers’ salaries 400,000
Depreciation – building 120,000
Office supplies 60,000
Depreciation – store equipment 110,000
Store supplies 80,000
Sales salaries 500,000
Sales returns and allowances 200,000
Purchase discounts 100,000
Income tax expense 360,000

3. Statement of Cash Flows

Hill Company provided the following comparative statement of financial position

2010 2009
Assets
Cash and cash equivalents 750,000 950,000
Accounts receivable 1,750,000 1,100,000
Inventory 2,550,000 1,800,000
Prepaid expenses 100,000 150,000
Property, plant and equipment 5,300,000 4,300,000
Accumulated depreciation (1,150,000) (800,000)
Total 9,300,000 7,500,000

Liabilities and equity

Accounts payable 1,250,000 1,000,000
Accrued expenses 50,000 200,000
Share capital 4,750,000 4,250,000
Retained earnings 3,250,000 2,050,000
Total 9,300,000 7,500,000

Additional information:

1. The statement of retained earnings for 2010 showed net income of P 1,500,000 and cash dividend paid of
P 300,000.

2. During the year, the entity purchased equipment for cash and issued share capital for cash.
Required: (Using Excel)

1. Prepare a statement of cash flows for 2010 using the indirect method.
2. Prepare a statement of financial position and income statement.
3. Name the excel file to your “LAST NAME-Comped421”
4. Email to rmarcellones@umindanao.edu.ph with Subject: Comped 421 – 3:30-5:30 (Lastname)