5. The entity borrowed P400,000 from the bank to be paid in June 30, 2022.6. Share capital at par value of P400,000 was issued for cash at a premium of P100,000.7. The treasury shares were re-issued for P130,000 cash.8. The patent was fully amortized.Required:1 Prepare the journal entries to record the transactions as provided for by the additionalinformation. This will give a hint on how cash was affected specially for investing andfinancing activities.2. Prepare the statement of cash flows for Happy Hearts Company for the year endedDecember 31, 2021. Comprehensive ProblemHappy Hearts Company provided the following statements of financial position at year-end andother financial data relating to activities during the current year20212020200,0001,040,000600,0001,100,000150,0001,200,000110,000300,0003,400,000(900,000)Cash and cash equivalentsAccounts receivable, net of allowanceTrade notes payableInventoryPrepaid expensesInvestment in equity securities, at costProperty, plant and equipmentAccumulated depreciation200,0001,360,000120,000500,0002,000,000(600,000)Patent80.0004.900.000Total5.960.000Accounts payableTrade notes payableAccrued expenses880,00060,000100,000400,0003,000,000530,000990,000840,000240,000330,000Notes payable (short-term debt)Share capital, P100 parShare premiumRetained earningsTreasury shares, at cost2,400,000400,000790,000(100,000)4.900.000Total5.960.000The statement of retained earnings for the year ended December 31, 2021 showed thefollowingRetained earnings, January 1Net income790,0001.000.0001,790,000(800.000)990 000TotalCash dividends paidRetained earnings, December 31Additional information:1. The company sold an investment in equity securities for P240,000 cash. There was noother transaction affecting the investment in equity securities.2. Land was purchased in the current year for P1,200,000 paying P1,000,000 cash andissuing P200,000 share capital at par value.3. Equipment costing P200,000 and having a carrying amount of P80,000 was sold forP60,000 cash4. Equipment of P400,000 was purchased for cash.

Name: 5. The entity borrowed P400,000 from the bank to be paid in June 30,
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Description: 5. The entity borrowed P400,000 from the bank to be paid in June 30, 2022.6. Share capital at par value of P400,000 was issued for cash at a premium of P100,000.7. The treasury shares were re-issued for P130,000 cash.8. The patent was fully amortize

A Cash flow statement is a financial statement which helps an entity to understand the flow of cash…

Business

Accounting

Required: 1 Prepare the journal entries to record the transactions as provided for by the additional information. This will give a hint on how cash was affected specially for investing and financing activities. 2. Prepare the statement of cash flows for Happy Hearts Company for the year ended December 31, 2021.

Required: 1 Prepare the journal entries to record the transactions as provided for by the additional information. This will give a hint on how cash was affected specially for investing and financing activities. 2. Prepare the statement of cash flows for Happy Hearts Company for the year ended December 31, 2021.

Century 21 Accounting General Journal

11th Edition

ISBN:9781337680059

Author:Gilbertson

Publisher:Gilbertson

Chapter16: Financial Statements And Closing Entries For A Corporation

Section: Chapter Questions

Problem 5AP

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