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Accounting 2

1. The cash balance at the beginning of 2017 was unknown. 2. Key changes from 2016 to 2017 included increases in accounts receivables, building, notes receivables - collectible, trading securities, land, and equipment. Inventory decreased. 3. Liabilities decreased with lower accounts payable and the same mortgage payable within 1 year.

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16 views

Accounting 2

1. The cash balance at the beginning of 2017 was unknown. 2. Key changes from 2016 to 2017 included increases in accounts receivables, building, notes receivables - collectible, trading securities, land, and equipment. Inventory decreased. 3. Liabilities decreased with lower accounts payable and the same mortgage payable within 1 year.

Uploaded by

cherryann
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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I.

Determine if the following business transactions are part of Operating, Investing or


Financing Activities. (2 points each)
__________1. Cash receipts from sale of intangible assets.
__________2. Cash receipts from commissions and fees.
__________3. Cash payments to and on behalf of the employees.
__________4. Cash payment for self-contruction of a building
__________5. Cash proceeds from issuing short or long-term borrowings
__________6. Cash receipts from insurance policy benefits
__________7. Cash payments to acquire investments in equity or debt instruments
__________8. Cash flows from non-trade creditors
__________9. Cash payments to suppliers of goods and services
__________10. Cash payments to shareholders to acquire or redeem the enterprise’s
shares
__________11. Payments of cash dividends to shareholders of record
__________12. Cash receipts from sale of a fully-depreciated equipment
__________13. Cash receipts from trade creditors
__________14. Cash repayments of amounts borrowed
__________15. Cash receipts from the sale of goods
__________16.Cash advances made by a financial institution
__________17. Cash proceeds from issuing common and preferred shares
__________18. Cash receipts from rendering of services
__________19. Cash payment for acquisition of a land in order to construct a building
__________20. Cash receipts from contracts held for dealing or trading purposes
__________21. Cash proceeds from maturity of short-term investments
__________22. Cash received from disposal of investment in associates
__________23. Payments for acquisition of treasury shares
__________24. Cash payment of income taxes
__________25. Cash payments from contracts held for dealing or trading purposes

II. Computation. Show your solutions in good form

1. The following information is available from Avocado Company’s accounting records for
the year ended December 31, 2016:
 Cash received from customers P870,000
 Cash received for rent 10,000
 Cash paid to suppliers and employees 510,000
 Taxes paid 110,000
 Gain on sale of equipment 300,000
What is the net cash flow from operating activities for 2016?

2. Watermelon, Inc. has provided the following 2016 account balances for the preparation
of the annual statement of cash flows:
Accounts January 1 December 31
Accounts Receivable P115,000 P145,000
Allowance for bad debts 4,000 5,000
Prepaid Rents 62,000 41,000
Accounts Payable 97,000 112,000
Salaries Payable 56,000 87,000
Inventories 45,000 72,000
Watermelon’s profit for 2016 is P750,000. What is the 2016 net cash from operations?

3. Strawberry Company’s transactions for the year ended December 31, 2016 included the
following:
 Purchased real estate for P750,000 cash which was borrowed from a bank
 Sold investment securities for P300,000
 Paid dividends of P200,000
 Issued 500 ordinary shares for P650,000 cash
 Purchased machinery and equipment for P825,000 cash
 Paid P250,000 toward a bank loan.

How much should be reported as net cash used in investing activities?


How much should be reported as net cash used in financing activities?

4. The following was taken from the 2016 financial statements of Mango Company:
Accounts Payable January 1: P815,000 December 31: P967,000
Purchases, all on account: P3,408,000

How much is the amount of cash payments made to suppliers during 2016?

5. The profit or loss accounts of Star Apple Company for the year 2016 included the
following:
Revenues P8,000,000
Operating Expenses P7,200,000

The operating expenses included depreciation of P150,000 and intangible asset


amortinzation of P20,000.

Changes in current asset and current liability accounts during 2016 were as follows:
 Accounts Receivable P60,000 increase
 Merchandise Inventory P50,000 increase
 Accounts Payable P90,000 decrease
 Salaries and wages payable P30,000 increase
 Interest payable P5,000 increase
 Income tax payable P25,000 decrease
How much should be reported as cash generated from operating activities during 2016?
Problem 1
Amor Studio provided the following statements:
Statement of Financial Position
2017 2016
Cash P100,000 ?
Accounts Receivables 250,000 220,000
Building 300,000 150,000
Notes Receivables – 2 years 100,000 50,000
Collectible
Notes receivables 100,000 50,000
Trading Securities 20,000 25,000
Land 220,000 230,000
Prepaid Insurance 5,000 4,500
Accrued Income 4,500 5,000
Inventory 180,000 350,000
Equipment 390,000 350,000
Total Assets 1,669,500 1,554,500
Accounts Payable 300,000 350,000
Mortage Payable- payable within 1 50,000 40,000
yr

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