CASE 2 STATEMENT OF CASH FLOWS

Soul Silver Company’s comparative balance sheet and income statement for last year appear below: BALANCE SHEET Ending Beginning Balances Balances Cash P 62,000 P 38,000 Accounts receivable 85,000 66,000 Inventory 31,000 44,000 Prepaid expenses 0 4,000 Long-term investments 260,000 210,000 Plant and equipment 450,000 450,000 Accumulated depreciation (255,000) (219,000) Total Assets P 633,000 P 593,000 Accounts payable P 33,000 P45,000 Accrued liabilities 36,000 18,000 Taxes payable 17,000 24,000 Bonds payable 150,000 190,000 Deferred taxes 41,000 24,000 Common stock 130,000 100,000 Retained earnings 226,000 192,000 Total Liabilities & Equity P 633,000 P 593,000 INCOME STATEMENT Sales P 610,000 Less: Cost of goods sold 330,000 Gross margin 280,000 Less: Operating expenses 180,000 Net operating income 100,000 Less: Income taxes 30,000 Net income P 70,000 The company declared and paid P36,000 in cash dividends during the year. Required: Prepare a statement of cash flows.

Heart Gold Company’s comparative balance sheet and income statement for last year appear below: BALANCE SHEET Ending Beginning Balances Balances Cash P 60,000 P 25,000 Accounts receivable 48,000 61,000 Inventory 56,000 48,000 Prepaid expenses 13,000 19,000 Long-term investments 300,000 210,000 Plant and equipment 470,000 470,000 Accumulated depreciation (222,000) (188,000) Total Assets P 725,000 P 645,000 Accounts payable P 59,000 P36,000 Accrued liabilities 42,000 24,000 Taxes payable 7,000 14,000 Bonds payable 80,000 140,000 Deferred taxes 38,000 23,000 Common stock 110,000 70,000 Retained earnings 389,000