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    Cash Flow

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    Nathaniel Tan
    The document contains the income statement and statement of cash flows for Robyn Company for the year ended December 31, 2019. The income statement shows a net loss of ₱40,000 while the statement of cash flows shows an increase in cash of ₱85,000 from operating, investing, and financing activities. The statement of cash flows is presented using both the indirect and direct methods.

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    © All Rights Reserved
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    Cash Flow

    Uploaded by

    Nathaniel Tan
    25 views4 pages
    The document contains the income statement and statement of cash flows for Robyn Company for the year ended December 31, 2019. The income statement shows a net loss of ₱40,000 while the statement of cash flows shows an increase in cash of ₱85,000 from operating, investing, and financing activities. The statement of cash flows is presented using both the indirect and direct methods.

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    The document contains the income statement and statement of cash flows for Robyn Company for the year ended December 31, 2019. The income statement shows a net loss of ₱40,000 while the statement of cash flows shows an increase in cash of ₱85,000 from operating, investing, and financing activities. The statement of cash flows is presented using both the indirect and direct methods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    25 views4 pages

    Cash Flow

    Uploaded by

    Nathaniel Tan
    The document contains the income statement and statement of cash flows for Robyn Company for the year ended December 31, 2019. The income statement shows a net loss of ₱40,000 while the statement of cash flows shows an increase in cash of ₱85,000 from operating, investing, and financing activities. The statement of cash flows is presented using both the indirect and direct methods.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Problem 1

    Robyn Company
    Income Statement
    For the Year Ended December 31, 2019

    Sales ₱370,000.00
    Cost of Goods Sold 258,000.00
    Gross Income 112,000.00
    Total Operating Expenses 160,000.00
    Operating Income (48,000.00)

    Other Income and Expenses


    Interest Income 6,000.00
    Gain on Sale of Investments 5,000.00
    Interest Expense (3,000.00)
    Total Other Income and Expenses 8,000.00

    Net Income (₱40,000)


    Robyn Company
    Statement of Cash Flows
    For the Year Ended December 31, 2019

    Cash Flow from Operating Activities


    Net Income (40,000.00)
    Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities:
    Depreciation 55,000.00
    Gain from Sale of Investment (5,000.00) 50,000.00
    Net Cash Flow: Operating Activities 10,000.00

    Cash Flow from Investing Activities


    Sale of Investment 80,000.00
    Purchase of Fixtures and Equipment (340,000.00)
    Purchase of Investment (75,000.00)
    Net Cash Flow: Investing Activities (335,000.00)

    Cash Flow from Financing Activities


    Sale of Capital Stock 420,000.00
    Purchase of Treasury Stock (10,000.00)
    Net Cash Flow: Financing Activities 410,000.00

    Total Cash Flow Increase (Decrease) 85,000.00


    Cash Balance, January 1, 2019 140,000.00
    Cash Balance, December 31, 2019 ₱225,000.00

    I agree with Robyn in that, in the end, there is a net increase in cash of 85,000.
    Problem 2

    Indirect Method

    Robyn Company
    Statement of Cash Flows
    For the Year Ended December 31, 2019
    Cash Flow from Operating Activities
    Net Income ₱125,000.00
    Adjustments to Reconcile Net Income to Net Cash Flow from Operating Activities:
    Depreciation ₱33,000.00
    Loss on Sale of Equipment 2,000.00
    Accounts Receivable Increase (42,000.00)
    Inventory Increase (54,000.00)
    Prepaid Expenses Decrease 2,000.00
    Accounts Payable Decrease (17,000.00)
    Accrued Expenses Payable Increase 10,000.00 (66,000.00)
    Net Cash Flow: Operating Activities 59,000.00

    Cash Flow from Investing Activities


    Sale of Equipment 34,000.00
    Sale of Land 25,000.00
    Purchase of Equipment (166,000.00)
    Net Cash Flow: Investing Activities (107,000.00)

    Cash Flow from Financing Activities


    Common Stock Issued for Cash 130,000.00
    Payment of Dividends (55,000.00)
    Payment of Bonds Payable (10,000.00)
    Net Cash Flow: Financing Activities 65,000.00

    Total Cash Flow Increase (Decrease) 17,000.00


    Cash Balance, January 1, 2019 37,000.00
    Cash Balance, December 31, 2019 ₱54,000.00

    Noncash investing and financing activities

    Conversion of bonds into common stock ₱30,000


    Direct Method

    Robyn Company
    Statement of Cash Flows
    For the Year Ended December 31, 2019

    Cash Flow from Operating Activities

    Cash Collected from Customers ₱848,000.00

    Cash Payments:
    To Supplier for Inventory (₱536,000.00)
    For Operating Expenses (176,000.00)
    For Interest Expense (12,000.00)
    For Income Tax Expense (65,000.00) (794,000.00)
    Net Cash Flow: Operating Activities 59,000.00

    Cash Flow from Investing Activities


    Sale of Equipment 34,000.00
    Sale of Land 25,000.00
    Purchase of Equipment (166,000.00)
    Net Cash Flow: Investing Activities (107,000.00)

    Cash Flow from Financing Activities


    Common Stock Issued for Cash 130,000.00
    Payment of Dividends (55,000)
    Payment of Bonds Payable (10,000)
    Net Cash Flow: Financing Activities 65,000.00

    Total Cash Flow Increase (Decrease) 17,000.00


    Cash Balance, January 1, 2019 37,000.00
    Cash Balance, December 31, 2019 ₱ 54,000.00

    Noncash investing and financing activities

    Conversion of bonds into common stock ₱30,000

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