BSIHM - CLOHS 2A EC 1

GROUP 1
CASH FLOW PROBLEMS

A. Abel Company provided the following data for the year:

Cash balance, beginning of the year 1,300,000
Cash flow from financing activities 1,000,000
Cash flow from operating activities 400,000
Cash flow from investing activities (1,500,000)
Total shareholders’ equity, beg of the 2,000,000
year

What is the cash balance at the end of the current year?

Operating activities 400,000
Financing activities 1,000,000
Investing activities (1,500,000)
Net decrease in cash (100,000)
Total shareholders’ equity, beg of the year 2,000,000
1,900,000
Cash balance, beginning of the year 1,300,000
Cash balance at the end of the current year 3,200,000

PAUL BERNARD
B. Villanueva Company provided the following data for the preparation of SCF for
the current year:
Dividends declared and paid 800,000
Net cash used in investing activities 2,500,000
Net cash used in financing activities 800,000

December 31 January 1
Cash 2,100,000 1,200,000
Other Assets 21,000,000 22,700,000
Liabilities 10,500,000 11,700,000
Share Capital 2,000,000 2,000,000
 Retained Earnings 10,600,000 10,200,000

What is the net cash provided by operating activities?

2,100,000=1,200,000+x-2,500,000-8,000,000 x = 4,200,000

DARYL ALMINANZA
C. Sun Company provide the following data for the preparation of SCF for the
current year:
Increase in accounts receivable 300,000
Decrease in income tax payable 170,000
Depreciation 1,000,000
Net Income 250,000
Gain on sale of equipment 440,000
Loss on sale of building 210,000

What amount should be reported as net cash provided by operating activities?

MM DE VILLA
D. Francis Aron reported net income of P7,500,000 for the current year.
The following account balances are provided for the preparation of the statement of
cash flow for the year:
January 1 December 31
Accounts Receivable 1,150,000 1,450,000
Allowance for doubtful 40,000 50,000
accounts
Prepaid rent expense 620,000 410,000
Accounts Payable 970,000 1,120,000

What is the net cash provided by operating activities?

(P7,500,000) – 1,150,000= 6,350,000
1,450,000-1,120,000= 330,000
6,350,000 – 330,000 = 6,020,000

SEAN TAN
E. Maria Teresa provided the following information for the current year:
Net Income 3,960,000
Depreciation Expense 1,020,000
Amortization Expense 200,000
Decrease in Accounts Receivable 1,260,000
Increase in Inventory 900,000
Increase in Accounts Payable 240,000
Payment of dividends 540,000
Purchase of financial asset 220,000
Decrease in income tax payable 160,000
Increase in long-term note payable 2,000,000

What is the net cash flow from operating activities?

Net Income 3,960,000

Depreciation Expense 1,020,000
Amortization Expense 200,000
Decrease in Accounts Receivable 1,260,000
Increase in Inventories (900,000)
Increase in Accounts Payable 240,000
Decrease in Income Tax Payable (160,000)
Net cash flow from operating activities 5,620,000

GABBY MACALINGA
 F. Faye Company provided the following data for the current year:
Gain on sale of equipment 60,000
Proceeds from sale of equipment 100,000
Purchase of bond investment 1,800,000
Amortization 20,000
Dividend declared 450,000
Dividend paid 380,000
Proceeds from sale of treasury share 750,000

1. What is the net cash provided by financing activities?

Proceeds from sale of treasury share 750, 000
Dividend pain - 380, 000
370, 000

2. What is the net cash used in investing activities?

Purchase of bond investment 1,800,000 can be considered under the investing
activities.

FAYE BATHAN
G. MALEBY Company provided the following data for the current year:
Purchase of real estate for cash 5,500,000
Cash was borrowed from bank to purchase 5,500,000
real estate
Sale of investment securities (Long-term 5,000,000
asset) for cash
Dividend paid 6,000,000
Issuance of ordinary share 2,500,000
Purchase of patent for cash 1,250,000
Payment of bank loan 1,500,000
Increase in customer’s deposit 200,000
Issuance of bonds payable for cash 3,000,000

1. What is the net cash provided by financing activities?

Net cash= cash borrowed – divided paid + issuance of ordinary share – Payment of
bank loan + issuance of bands payable for cash
= 5,500,000 – 6,000,000 + 2,500,000 – 1,500,000 + 3,000,000

= 5,500,000 = 6,000,000

+ 2,500,000 + 1,500,000

3,000,000 = 7,500,000

= 11,000,000
 2. What is the net cash used in investing activities?
= 5,500,000 – 5,000,000 + 1,250,000

11,000,000 – 7,500,000
= 3,500,000

= 5,500,000 = 5,000,000

+ 1,250,000

= 6,750,000

6,750,000 – ,5,000,000
= 1,7500,000

IHNA GONZALES
H. Rose Company provided the following information during the current year
Dividend received 500,000
Dividend paid 1,000,000
Cash received from customers 9,000,000
Proceeds from issuing share capital 1,500,000
Interest received 200,000
Proceeds from sale of long-term 2,000,000
investment
Cash paid to suppliers and employees 6,000,000
Interest paid 400,000
Income taxes paid 300,000
Cash balance, Jan 1 1,800,000

1. What is the net cash provided by operating activities for the current year
using direct method?

Answer: 3,000,000
Solution: Cash Received from Customers = Sales + Decrease (or - Increase) in
Accounts Receivable.

Cash received from 9,000,000

customers
(minus) -
Cash paid to suppliers and
6,000,000
employees
 Interest received (Add) +
200,000

Dividend received (add) +

(500,000)
Interest paid (minus) -
400,000
Income taxes paid (Minus) -
300,000
=3,000,000

2. What is the net cash provided by investing activities?

Answer: 2,000, 000

Solution:
Proceeds from sale of long-term 2,000,000
investment
=2,000,000

3. What is the net cash provided by financing activities?

Answer: 500,000

Solution:
Proceeds from issuing share capital 1,500,000

(Minus) -
Dividend paid
1,000,000

=500,000
TRIXIE CASA
I. Star Company provided the following data for the preparation of statement of
cash flows:
Cash balance, beginning 1,500,000
Cash paid to purchase inventory 7,800,000
Cash received from sale of trading 2,500,000
securities
Cash paid for interest 450,000
Cash paid to repay a loan 1,000,000
Cash collected from customers 10,000,000
Cash received from issuance of ordinary 1,200,000
shares
Cash paid for dividend 2,000,000
Cash paid for income taxes 1,350,000
Cash paid to purchase trading securities 1,000,000

1. What is the net cash provided by operating activities?

Cash collected from customers 10,000,000

Cash paid to purchase inventory (7,800,000)
Cash paid for income taxes (1,350,000)
Cash paid for interest (450,000)
Net cash flow from operating activities 400, 000

*Investing
Cash received from sale of trading securities 2,500,000
Cash paid to purchase trading securities (1,000,000)
Net cash flow from investing activities 1,500,000

2. What is the net cash used in financing activities?

Cash received from issuance of ordinary shares 1,200,000
Cash paid to repay a loan (1,000,000)
Cash paid for dividend (2,000,000)
Net cash flow from financing activities (1,800,000)

Net Increase in cash 100,000

3. What is the cash balance at year-end?

Cash balance, beginning 1,500,000
Cash balance at year-end 1,600,000