Answer With Solution

1. Peter Senen uses the direct method to prepare its statement of cash flows: Peter Senen had the following cash flows during 2020:

Cash receipts from issuance of ordinary sharesP800,000

Cash receipts from customers400,000

Cash receipts from dividends on long term investments60,000

Cash receipts from repayment of loan made to another company440,000

Cash payments for wages & other operating expenses240,000

Cash payment for insurance20,000

Cash payment for dividends40,000

Cash payment for taxes80,000

Cash payment to purchase land160,000

What is the net cash provided (used) from operating activities?

a. (P40,000)

b. P60,000

c. P80,000

d. P120,000

2. JYD Company uses the direct method to prepare its statement of cash flows. JYD had the following cash flows during 2020:

Cash receipts from sale of n old vanP 160,000

Cash receipts from issuance of ordinary shares2,000,000

Cash receipts from issuance of 10%, 10 year bonds1,500,000

Cash receipts from customers1,000,000

Cash receipts from repayment of loan made to other company1,200,000

Cash receipts for dividends150,000

Cash receipts as interest150,000

Cash payment for operating expenses650,000

Cash payments for taxes300,000

Cash payments for equity securities bought900,000

Cash payments for equipment purchased300,000

Cash payment for land purchased1,200,000

What is the net cash provided (used) from investing activities?

a. (P1,040,000)

b. P1,640,000

c. P1,940,000

d. (P2,240,000)

3. Ethel Company uses the direct method to prepare its statement of cash flows. Ethel had the following cash flows during 2020:

Cash receipts from issuance of bondsP 800,000

Cash receipts from issuance of ordinary shares1,400,000

Cash receipts from customers700,000

Cash receipts from dividends on long term investments105,000

Cash receipts from repayment of loan made to another company660,000

Cash payments for wages & other operating expenses420,000

Cash payments for reacquisition of treasury shares250,000

Cash payments for dividends70,000

Cash payments for taxes140,000

Cash payments for purchase of land280,000

What is the net cash provided (used) from financing activities?

a. P1,530,000

b. P1,670,000

c. P1,880,000

d. P1,950,000

4. Combate Company provided the following relevant information involving its operating activities for the year ended December 31, 2020

12/31/201912/31/2020

Accrued interest payable recognizedP40,000P50,000

Depreciation expense recognized72,80075,600

Prepaid expenses recognized3,1004,940

For the year ended December 31, 2020, Combate Company reported a net income after tax of P648,000.

What is the net cash flow from operating activities that would be shown in its cash flow statement?

a. P637,040

b. P637,080

c. P731,760

d. P735,440

5. The net income for the year ended December 31, 2020 for Bonghil Corporation was P3,520,000. Additional data follow:

Purchase of plant assetsP2,800,000

Depreciation of plant assets1,480,000

Dividends declared on plant assets970,000

Net decrease in non-cash current assets290,000

Loss on sale of equipment130,000

What should be the cash provided (used) from operating activities in Bonghil's statement of cash flows for the year ended December 31, 2020?

a. P637,040

b. P637,080

c. P5,420,000

d. P735,440

6. JYD Company reported the following information for the current year:

SalesP2,800,000

Cost of goods sold1,000,000

Distribution costs400,000

Administrative expenses350,000

Depreciation250,000

Interest expense80,000

Income tax expense280,000

All sales were made for cash and all expenses other than depreciation and bond premium amortization of P20,000 were paid in cash. All current assets and current liabilities remained unchanged.

What is the net cash provided (used) by operating activities for the current year?

a. P440,000

b. P690,000

c. P670,000

d. P710,000

7. Melanie Company had the following account balances for the current year:

December 31January 1

Accounts payableP500,000P700,000

Inventory300,000450,000

Accounts receivable800,000750,000

All purchases of inventory were on account.

The entity provided the following income statement information for the current year:

RevenueP9,800,000

Cost of goods sold(4,000,000)

Other expenses(1,300,000)

Depreciation expense(1,000,000)

Loss on sale of equipment(100,000)

Net IncomeP3,400,000

What is the net cash provided (used) by operating activities?

a. P4,500,000

b. P4,400,000

c. P4,600,000

d. P4,300,000

8-9. Peter Senen Company provided the following data for the current year:

SalesP7,500,000

Cost of goods sold( 4,000,000)

Expenses paid( 1,100,000)

Depreciation(400,000)

Net IncomeP2,000,000

Increase in accounts receivableP500,000

Decrease in inventory1,000,000

Decrease in accounts payable600,000

8. What amount of cash was received from the customers?

a. P8,000,000

b. P7,000,000

c. P6,500,000

d. P5,500,000

9. What is the net cash provided (used) by operating activities?

a. P2,000,000

b. P2,400,000

c. P2,300,000

d. P1,700,000

10. JYD Company provided the following information for the year 2020:

Purchased a building for P1,200,000. Paid P400,000 and signed a mortgage with the seller for the remaining P800,000.

Executed a debt-equity swap and replaced a P600,000 loan by giving the lender ordinary shares worth P600,000 on the date the swap was executed.

Purchased land for P1,000,000. Paid P350,000 and issued ordinary shares worth P650,000.

Borrowed P550,000 under a long term loan agreement

Used the cash from the loan proceeds for purchase of additional inventory P150,000, payment of cash dividend P300,000 and increase in the cash balance P100,000

What amount should be reported as net cash used in investing activities in the statement of cash flows?

a. (P1,200,000)

b. (P2,200,000

c. (P400,000)

d. (P750,000)

11-12. JYD Company reported net income of P3,000,000 for the current year. Changes occurred in certain accounts as follows:

EquipmentP250,000 increase

Accumulated depreciation400,000 increase

Note payable300,000 increase

During the year, the entity sold equipment costing P250,000 with accumulated depreciation of P120,000 for a gain of P50,000.

In December of the current year, the entity purchased equipment costing P500,000 with P200,000 cash and a 12% note payable of P300,000.

11. In the statement of cash flows, what amount should be reported as net cash used in investing activities?

a. (P20,000)

b. (P120,000)

c. (P220,000)

d. (P350,000)

12. In the statement of cash flows, what amount should be reported as net cash used in operating activities?

a. P3,400,000

b. P3,470,000

c. P3,520,000

d. P3,570,000

13-15. St. Peter Company provided the following data:

20202019

Cash350,000150,000

Accounts receivable, net840,000580,000

Merchandise Inventory660,000420,000

Prepaid Expenses50,000100,000

Long term investment80,000-

Property, Plant and Equipment1,130,000600,000

Accumulated depreciation110,00050,000

Accounts payable530,000440,000

Accrued expenses140,000130,000

Dividends payable70,000-

Note payable-long term500,000-

Share Capital1,200,000900,000

Retained earnings560,000330,000

Net credit sales6,400,0004,000,000

Cost of goods sold5,000,0003,200,000

Expenses1,000,000520,000

Net income400,000280,000

All accounts receivable and accounts payable relate to trade merchandise. Accounts payable are recorded net and always paid to take all of the discounts allowed.

The allowance for doubtful accounts at the end of 2020 was the same as at the end of 2019. No receivables were charged against the allowance during 2020.

The proceeds from the note payable were used to finance a new store building. Share capital was sold to provide additional working capital.

13. The net cash provided (used) by operating activities is

a. P400,000

b. P100,000

c. P200,000

d. P110,000

14. The net cash provided (used) by financing activities is

a. P140,000

b. P300,000

c. P500,000

d. P700,000

15. The net cash provided (used) by investing activities is

a. P80,000

b. P530,000

c. P610,000

d. P660,000