Introduction - FM-E3
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XYZ Co. made one sale of PHP 5M for merchandise that cost PHP 4M to purchase. While XYZ paid the costs of PHP 4M during the year, they had not yet received payment of PHP 5M from their customer by year's end. XYZ's income statement shows sales of PHP 5M, costs of PHP 4M, and a gross profit of PHP 1M. However, XYZ's statement of cash flows shows no cash inflows during the year, while they had PHP 4M in cash outflows to purchase the merchandise.
Introduction - FM-E3
- 2. XYZ Co. in the calendar year just ended made one sale in the amount of PHP 5M for merchandise purchased during the year at a total cost of PHP 4M although the firm paid in for the merchandise during the year, it has yet to collect at year end the PHP 5M from the customer to whom the sale was made
- 3. XYZ CORP. INCOME STATEMENT For the Year Ended Sales PHP 5M Less: Cost of Sales (4M) Gross Profit 1M
- 4. FINANCIAL MANAGER XYZ CORP. STATEMENT OF CASH FLOW For the Year Ended CASH INFLOW 0 LESS: CASH OUTFLOW (4M) NET CASH FLOW (4M)
- 5. example -XLY CORPORATION provided the following details last January 30, 2013 a.) purchases worth PHP 5,985,000 wherein 35% was paid in cash and 65% was on account b.) received a telephone bill worth PHP 1,200
- 6. c.) payment of rent amounting to PHP 8,000 was made d.) salaries and wages worth PHP 185,000 was allocated, of which 55% was claimed and the other 45% was unclaimed e.) sold merchandise amounting to 7,000,000 wherein 75% was on account and 25% was paid in cash. Present the Finance and Accounting Point of view