Exercise Unit 2

1.The accounts of Gloria Detoya Traders contain the following amounts at December 31, 2022:

Trial Balance
Account Titles DR CR
Cash 304,500
Accounts Receivable 484,200
Merchandise Inventory 528,000
Store Supplies 10,600
Office Supplies 6,360
Prepaid Insurance 4,600
Land 145,000
Building 202,600
Accum. Depreciation-Building 82,500
Office Equipment 86,000
Accum. Depreciation -Office Eq. 50,000
Accounts Payable 206,830
Salaries Payable 20,000
Interest Payable 38,400
Long-term Notes Payable 480,000
Detoya, Capital 593,920
Detoya, Withdrawals 200,000
Sales 2,463,500
Sales Returns & Allowances 27,500
Sales Discounts 42,750
Purchases 1,264,000
Purchases Returns & Allow. 56,400
Purchases Discounts 21,360
Transportation In 82,360
Sales Salaries Expense 225,000
Office Salaries Expense 171,000
Store Supplies Expense 15,400 -
Office Supplies Expense 12,040
Insurance Expense- Selling 5,600
Insurance Expense- General 3,600
Transportation Out 57,400
Utilities Expense 48,000
Depreciation Expense-Building 26,000
Depreciation Expense- Office Eq. 22,000
Interest Expense 38,400
Total 4,012,910 4,012,910

Merchandise inventory, beginning P528,000; Merchandise inventory, ending P483,000

Required: Prepare the income statement, statement of changes in equity and

statement of financial position.
2. The statement of financial position of Pedro Company, for December 31, 2022 and 2021, are as follows:

2022 2021
Cash P 68,000 P 42,500
Accounts receivable (net) 61,000 70,200
Inventories 121,000 105,000
Investments ..... 100,000
Equipment 515,000 425,000
Accumulated depreciation-equipment (153,000) (175,000)
P612,000 P567,700

Accounts payable P 59,750 P 47,250

Bonds payable, due 2010 ..... 75,000
Common stock, P20 par 375,000 325,000
Premium on common stock 50,000 25,000
Retained earnings 127,250 95,450
P612,000 P567,700

Additional information:

(a) Net income, P71,800.

(b) Depreciation reported on income statement, P38,000.
(c) Fully depreciated equipment costing P60,000 was scrapped, no salvage, and equipment was
purchased for P150,000.
(d) Bonds payable for P75,000 were retired by payment at their face amount.
(e) 2,500 shares of common stock were issued at P30 for cash.
(f) Cash dividends declared and paid, P40,000.
(g) Investments of P100,000 were sold for P125,000.

Required: Prepare a statement of cash flows using the indirect method.