NAME: JANVEL N.

MORALES APRIL 04, 2023

ACT172-J5-2: STATEMENT OF CASH FLOWS EXERCISE

Statement of Cash Flows Assignment

PROBLEM 1
Required:
Categorize each cash flow as (O) for operating, (I) for investing, or (F) for financing.
a. Cash received from sale of a building ------------------------------------- I
b. Cash paid for salaries ---------------------------------------------------------- O
c. Cash received for interest on a note receivable ------------------------ O
d. Cash paid to acquire a new truck ------------------------------------------ I
e. Cash loaned out to a customer in the form of a long-term note ---- F
f. Cash received for services rendered -------------------------------------- O
g. Cash paid for interest --------------------------------------------------------- O
h. Cash paid for insurance on equipment ----------------------------------- I
i. Cash received from a debtor representing payments of principal - O
j. Cash paid out to acquire a building ---------------------------------------- I

PROBLEM 2
Cash Flows from Operating Activities-Indirect Method
Imara Andam Business Solutions had a profit of P330,000 in 2019. During the year, the entity had
depreciation expense of P70,000. Accounts receivable increased by P110,000 and accounts payable
increased by P50,000. The entity started operations in 2019 and the foregoing are the entity’s only current
assets and current liabilities.
Required:
Determine the net cash flows from operating activities using the indirect method.

IMARA ANDAM BUSINESS SOLUTIONS

Statement of Cash Flows
For the Year Ended December 31, 2019

Cash flows from Operating Activities:

Net Income P 330,000
Depreciation Expense 70,000
Increase in Accounts Receivable (110,000)
Increase in Accounts Payable 50,000
Net cash provided by Operating Activities P 340,000
PROBLEM 3
Classifications of Events on Statement of Cash Flows
The following transactions pertain to the operations of Party Consultants, an events planning entity owned by
Eleanor Tan. The entity had the following transactions during the month:
Required:
Classify each of these transactions as a cash flow from operating activities (OA), investing activities (IA), or
financing activities (FA). Transactions that do not affect the statement of cash flows should be identified as
“n/a”
1. Received a P180, 000 cash investment from the owner. ---------------------- FA
2. Provided P400, 000 services on account ------------------------------------------ N/A
3. Incurred P220, 000 of operating expenses on account------------------------- N/A
4. Collected P320, 000 cash from accounts receivable ---------------------------- OA
5. Allowed a P30, 000 cash withdrawal to the owner of the business---------- FA
6. Paid P160, 000 cash on accounts payable---------------------------------------- OA
7. Performed services for P30,000 cash----------------------------------------------- OA
8. Paid P12, 000 cash for expenses---------------------------------------------------- OA

2. Prepare a statement of cash flows.

PARTY CONSULTANTS
Statements of Cash Flows
For the month ended XX-XX-XXXX

Cash flows from Operating Activities:

Collection of accounts receivable P 320,000
Payment made to accounts payable (160,000)
Cash received on services rendered 30,000
Cash paid for expenses (12,000)
Net cash provided by Operating Activities P 178,000

Cash flows from Investing Activities: -

Cash flows from Financing Activities:

Cash received from the owner P 180,000
Cash withdrawal by the owner (30,000)
Net cash provided by Financing Activities 150,000
TOTAL CASH FLOW P 328,000
PROBLEM 4

The following data are taken from the records of Howa Company for the year 2009.
Cash received
From customers P 500,000
Proceeds of Bank Loan 800,000
Additional Investment of Howa 125,000
Proceeds of sale of equipment 35,000
Dividends on stock investments 5,000
Interest Income 2,300
Commissions Income 10,000

Cash paid
Operating expenses 195,000
Principal of Bank Loan 200,000
Withdrawal of Howa 40,000
Interest on bank loan 4,000
Purchase of furniture 18,000
Taxes and licenses 5,600

Cash balance on January 1, 2009 is P555,000.

Required: Prepare a statement of cash flows.

HOWA COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2009

Cash flows from Operating Activities:

Cash Received from Customers P 500,000
Cash received from commissions income 10,000
Cash received from interest income 2,300
Cash paid on operating expenses (195,000)
Cash paid on taxes and licenses (5,600)
Dividends on stock Investments received 5,000
Cash payment of interest on Bank Loan (4,000)
Net cash provided by Operating Activities 312,700

Cash flows from Investing Activities:

Cash Received from proceeds of sale of equipment 35,000
Cash paid to purchase of furniture (18,000)
Net Cash provided by Investing Activities 17,000

Cash flows from Financing Activities:

Cash Received from proceeds of Bank Loan 800,000
Additional Investment of Howa 125,000
Cash withdrawal of Howa (40,000)
 Cash paid on principal of Bank Loan (200,000)
Net cash provided by Financing Activities 685,000
Net Increase in Cash and Cash Equivalents 1,014,700
Add: Cash and Cash Equivalents, beginning 555,000
Cash and Cash Equivalents, ending P 1,569,700

PROBLEM 5

The following data are taken from the records of Kiwi Pot Company for the year 2010.

Collections from customers P 1,750,000

Provision for bad Debts 7,000
Additional Investment of Kiwi 250,000
Withdrawal of Kiwi 225,000
Dividends on stock investments received 15,000
Interest Income received 7,800
Taxes and licenses paid 6,000
Operating expenses paid 305,000
Commissions Income received 20,000
Principal of Bank Loan paid 500,000
Interest on bank loan paid 15,000
Proceeds from sale of Equipment 45,000
Cash purchase of building 1,000,000
Proceeds of Bank Loan 670,000
Depreciation Expense 25,000

Cash balance on January 1, 2009 is P99,000.

Required: Prepare a statement of cash flows.

KIWI POT COMPANY

Statement of Cash Flows
For the Year Ended December 31, 2009
Cash flows from Operating Activities:
Cash collections from customers P 1,750,000
Interest Income received 7,800
Commissions Income Received 20,000
Interest on Bank Loan paid (15,000)
Taxes and Licenses paid (6,000)
Operating Expenses paid (305,000)
 Dividends on stock Investments received 15,000
Depreciation Expense 25,000
Provision for Bad Debts (Decrease) (7,000)
Net cash provided by Operating Activities 1,484,800
Cash flows from Investing Activities:
Proceeds from sale of Equipment 45,000
Cash Purchase of Building (1,000,000)
Net Cash used in Investing Activities (955,000)

Cash flows from Financing Activities:

Additional Investment of Kiwi 250,000
Proceeds of Bank Loan 670,000
Cash paid on principal of Bank Loan (500,000)
Withdrawal of Kiwi (225,000)
Net cash provided by Financing Activities 195,000
Net Increase in Cash and Cash Equivalents P 724,800
Add: Cash and Cash Equivalents, Beginning 99,000
Cash and Cash Equivalents, Ending P 823,800

PROBLEM 6

Portions of the financial statements for Myriad Products are provided below.

MYRIAD PRODUCTS COMPANY

Income Statement
For the Year Ended December 31, 2011
($ in millions)
Sales $660
Cost of goods sold (250)
Gross margin 410
Salaries expense $110
Depreciation expense 90
Patent amortization expense 5
Interest expense 20
Loss on sale of investments 3 (228)
Income before taxes and extraordinary 182
loss
Income tax expense (91)
Income before extraordinary loss 91
Extraordinary loss (earthquake) 10
Less: Tax savings (5) 5
Net Income $ 86

MYRIAD PRODUCTS COMPANY

 Selected Accounts from Corporative Balance Sheets
December 31, 2011 and 2010
($ in millions)

Year
2011 2010 Change
Cash $102 $100 $ 2
Accounts receivable 220 232 (12)
Inventory 440 450 (10)
Accounts payable 140 134 6
Salaries payable 80 86 (6)
Interest payable 25 20 5
Income taxes 15 10 5
payable

Required:
1. Prepare the cash flows from operating activities section of the statement of cash flows for Myriad
Products Company using the direct method.

2. Prepare the cash flows from operating activities section of the statement of cash flows for Myriad
Products Company using the indirect method.

MYRIAD PRODUCTD COMPANY

Statement of Cash Flows
For the Year Ended December 31, 2011
($ in millions)

Cash from Operating Activities

Cash received from customer $ 672
Cash payment to suppliers (234)
Cash payment to salaries expense (116)
Cash paid for interest expense (15)
Cash paid for income taxes (86)
Net cash provided by Operating Activities $ 221

MYRIAD PRODUCTD COMPANY

Statement of Cash Flows
For the Year Ended December 31, 2011
($ in millions)

Cash from Operating Activities

Net Income $ 86
Adjustments for noncash effects
Depreciation expense $ 90
Loss on sale of investment 3
Amortization expense 5
Extraordinary Loss 10
Tax Savings (5) 103
Changes for Operating Assets and Liabilities
Decrease in Accounts Receivable 12
Decrease in Inventory 10
 Increase in Accounts Payable 6
Decrease in Salaries Payable (6)
Increase in Interest Payable 5
Increase in Interest Taxes Payable 5 32
Net cash provided by operating activities $ 221