You are the Chief Finance Officer of Pandemic Restaurant. Management has suggested of a possibility expanding the business by offering new investment facilities to the community using existing funds. Another alternative offered is to release Phpl,000,000 to fund the possible business expansion. Upon discussing with the accountant, he provided you the following information. Evaluate the company if it is worth expanding using internal funds or to grab the one million pesos offer. Also make the necessary recommendation to top management.
Here is the financial statements of Pandemic Restaurant as of December 31, 2019.
Extracted text: PANDEMIC RESTAURANT STATEMENT OF CASH FLOWS For the Year ended December 31, 2019 (Amounts in Philippine Peso) 31-Dec-2019 31-Dec-2018 CASH FLOWS FROM OPERATING ACTIVITIES Depreciation 90,075.85 85,734.39 Provision of losses on AR Breakage and Losses on property, plant & equipt Spoilage, Breakage and Losses Write-off of Property, Plant and Equipment Breakage & losses on property, plant and equipment Prior Period adjustments Gain (Loss) on disposal of property and equipment Decrease (Increase) in Assets Loans and Receivables 508,510.78 (419,612.06) Inventory Suplies on Hand Prepaid Expense Increase (Decrease) in Liabilities 407,438.66 90,910.95 27,782.32 26,368.78 Accounts Payable SSS/EC/Pag-ibig/Philhealth Premiums Payable SSS/Pag-ibig loans Payable Withholding Tax Payable Staff Bond Payable Accrued Expenses Due to CETF (Apex) Interest on share capital and patronage refund Payable (41,577.17) (2,416.82) 78,174.71 31,084.89 12.21 (20,195.57) 5,508.75 3,483.75 28,007.67 22,659.11 288,710.89 575,596.31 Net Cash provided by/(used for) operating activities 1,372,449.10 413,809.30 CASH FLOWS FROM INVESTING ACTIVITIES Decrease (Increase) in Property and Equipment Other funds and deposits (36,277.50) (1,500,000.00) (31,744.64) Deposit on retunable container Net cash used in investing activities (1,536,277.50) (31,744.64) CASH FLOWS FROM FINANCING ACTITVITIES Increase (Decrease) in Share Capital 87,500.00 (144,400.00) Donations/Grants (199,243.04) Undivided Profits Statutory Funds 40,310.41 (65,091.69) (71,432.63) (209,491.69) Net Cash provided by/(used for) financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALEN CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE (235,261.03) 172,572.97 6,695,880.87 6,523,307.90 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOI 6,460,619.84 6,695,880.87 Cash Breakdown Cash in Bank - BPI Demand Deposit Cash in Bank - RCBC Demand Deposit Cash in Bank - BPI Savings Deposit Cash in Bank - BPI Time Deposit Cash in Bank - RCBC Time Deposit Change Fund Petty Cash Fund Revolving Fund Total Cash and Cash Equivalent 1,002,000.00 2,318,645.90 1,329,870.97 697,897.87 1,010,152.81 2,510,738.81 2,430,677.37 847,074.76 34,300.00 836,917.22 34,300.00 1,962.50 1,962.50 50,000.00 50,000.00 6,460,619.84 6,695,880.87
Extracted text: 2 Cashflow_Analysis_Drill.pdf - Adobe Reader File Edit View Window Help PANDEMIC RESTAURANT STATEMENT OF FINANCIAL CONDITION PANDEMIC RESTAURANT December 31, 2019 STATEMENT OF OPERATIONS (Amounts in Philippine Peso) Note For the Year ended December 31, 2019 ASSETS 31-Dec-2019 31-Dec-2018 (Amounts in Philippine Peso) Current Assets Cash and Cash Equivalent Loans and receivables - net 6,460,619.84 568,603.68 6.695,880,87 1,077,114.46 Note 31-Dec-2019 31-Dec-2018 4 REVENUE Gross Income from Operation Income from Investment/deposit 13 5,882,965.88 5,449,169.32 (23,694.81) 55,669.28 Inventory Supplies on Hand Prepaid Expenses Total Current Assets 599,483.97 1,006,922.63 53,780.91 14 41,527.27 25,998.59 Other Income 15 41.136.30 Total Revenue 5,965,629.45 5.481,143.79 7,654,706.08 8,833,698.87 Property and Equipment Office fumiture, fixture Store fumiture, fixture and equipment (SFFE) EXPENSES Salaries and Wages Employee Benefits SSS EC/Pag-ibig/Philhealth contributions 1,895,915.82 293,002.65 289,261.01 233,250.00 1,804,974.49 equipment (OFFE) 7 329,113.00 329,113.00 238.483.22 393,259.59 309,906.45 7 385.170.89 214,179.42 258,400.00 16 281,717.65 Kitchen/Canteen/Catering Equipt & Utensils (KCCEU) Total 7 Officers' Honorarium and allowances Advertising and Promotion Professional Fees Supplies Expense Meeting and conferences General assembly Trainings and Seminars Rental Expense Power, Light and Water (utilities) Travel and Transportation Insurance expense Repairs and Maintenance Taxes, Fees and Charges 1,032,279.04 996,001.54 908,347.12 35,000.00 311.343.97 less Accumulated Depreciation 8,000.00 331,042.01 16,996.00 27,000.00 7 998,422.97 Total Property and Equipment - net 33,856.07 87,654.42 17 9,253.00 25,259.00 Other Assets Investment in Bonds 1,500,000.00 3,450.00 1,155,000.00 431,003.08 16,279.00 1,596.40 10,721.56 13,011.00 1.155,000.00 370,985.68 16,222.00 1,596.40 3,040.00 Deposit on retunable container 3,450.00 Total Other Assets 1,503,450.00 3,450.00 TOTAL ASSETS 9,192,012.15 8,924,803.29 15,300.00 13.634.46 7,011.00 LIABILITIES AND MEMBERS' EQUITY Communication 12.585.26 Curent Liabilities Accounts Payable SSS EC/Pag-ibig/Philhealth Premiums Payable SS Pag-ibig loans Payable Withholding Tax Payable Staff Bond Payable Accrued Expenses Interest on share capital & patronage refund Payable Representation Employee Incentive Bank Charges Depreciation Doubtful account expense Provision for Probable Losses on AR Write-off of Property and Equipment Charges Members benefit expenses Legal Fees Breakage and Losses on property, plant & equipt Spoilage, Breakage and Losses Prior period Adjustment 10,445.00 8 94,689.59 136,266.76 31,282.89 9 109,457.60 1,000.00 10 12.21 90,075.85 85,734.39 6,477.16 20,195.57 35,821.75 9,124.01 41.330.50 1,095,488.76 806,777.86 Bank Due to CETF (Apex) 300,106.93 1,641,085.59 272,099.26 Total Current Liabilities 1,302,444.10 Members' Equity Share Capital Donations/Grants Undivided net surplus Statutory Funds: Reserve Fund 11 1,575,400.00 1,487,900.00 199,243.04 Miscellaneous 2,196.00 703.00 Total Expenses 4,845,322.61 4,574,779.23 NET SURPLUS 1,120,306.84 906,364.56 5,276,650.06 307,449.83 2,098.55 339,328.11 5,084,557.93 285,163.54 53.826.33 511.668.36 Distributed as follows: Reserve Fund Cooperative Education and training fund (local) Community Development Fund Optional Fund Total Statutory Funds Total Members' equity 112,030.68 28,007.67 33,609,21 22.406.14 28,007,67 90,636.46 Cooperative Education and training fund (local) Community Development Fund Optional Fund Cooperative Education and training fund (APEX) Interest on share capital & patronage refund Payable Total Statutory Funds 22.659.11 27.190.94 5.975,526.56 5.935,216.15 7.622.359.19 18,127.29 22.659.11 7,550,926.56 896.245.47 725,091.65 TOTAL LIABILITIES AND MEMBERS' EQUITY 9,192,012.15 8,924,803.29 1.120.306.84 906,364.56