MODULE 6Post-test

PREPARING THE FINANCIAL STATEMENTS - STATEMENT OF CASH FLOWS

Multiple Choice

Identify the choice that best completes the statement or answers the question.

1. On December 31, 2020, Harold Corporation provided the following information:

Dividend received

500,000

Dividend paid

1,000,000

Cash received from customers

9,000,000

Cash paid to suppliers and employees

6,000,000

Interest received

200,000

Interest paid on long-term debt

400,000

Proceeds from issuing share capital

1,500,000

Proceeds from sale of long-term investments

2,000,000

Cash paid for equity investment at FVOCI

800,000

Income taxes paid

300,000

Proceeds from long-term debt

3,000,000

What is the net cash provided by operating activities for 2020?

a. 3,300,000 b. 3,000,000 c. 2,700,000 d. 2,000,000

2. During 2020, Pyramid Co. had the following activities related to its company activities:

Cash receipts from sale of goods 4,500,000

Cash payments to suppliers 1,900,000

Cash collected from rent revenue 600,000

Cash payments of distribution expenses 500,000

Cash payment for insurance 300,000

Cash payments to purchase land 3,000,000

Cash proceed from sale of equipment 2,000,000

Purchase of equipment by issuing bonds 1,800,000

Proceeds from issuance of ordinary shares 1,300,000

Proceeds from issuance of preference shares 800,000

Cash dividends on preference shares paid 700,000

Purchase of treasury shares 1,100,000

Proceeds from sale of plant 1,500,000

1.The amount of net cash used in operating activities to appear at Pyramid's statement of cash flows for 2020 should be:

a. 2,400,000 b. 2,500,000 c. 2,700,000 d. 2,600,000

2.The amount of net cash used in investing activities to appear at Pyramid's statement of cash flows for 2020 should be:

a. 400,000 b. 500,000 c. 600,000 d. 700,000

3.The amount of net cash used in financing activities to appear at Pyramid's statement of cash flows for 2020 should be:

a. 350,000 b. 400,000 c. P 300,000 d. P 450,000

3. At the beginning of the current year, Daedalus Company reported cash balance of 6,000,000. During the current year, the entity disclosed the following changes in certain accounts:

Accounts receivable 1,000,000 increase

Inventory 700,000 decrease

Accounts payable 1,500,000 decrease

Total sales and cost of goods sold were 25,000,000 and 15,000,000 respectively.All sales and purchases were made on credit.Various expense of 3,200,000 were paid in cash.

What is the total amount of collections from customers?

a. 25,000,000 b. 24,000,000 c. 23,000,000 d. 22,000,000

What is the total amount of payment to suppliers?

a. 14,800,000 b. 17,300,000 c. 15,800,000 d. 15,000,000

What amount was reported as cash balance on December 31, 2020?

a.9,000,000 b. 13,000,000 c. 10,000,000 d. 11,000,000

4. Blue Ocean Company reported net income of P 5,500,000 for the current year.

Changes in certain accounts during the year are:

Investment in Blue Moon stock carried on the equity basis 360,000 increase

Accumulated depreciation for the year 110,000 increase

Unearned interest income 70,000 decrease

Premium on bonds payable 100,000 decrease

Deferred tax liability 130,000 increase

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

a. 5,100,000 b. 5,210,000 c. 5,200,000 d. 5,170,000

5. Kensington Industries reported net income of 50,000 in 2021. Depreciation expense was 19,000.

The following working capital accounts changed:

Accounting receivable 11,000 increase

Non-trading equity investment 16,000 increase

Inventory 7,300 increase

Non-trade note payable 15,000 increase

Accounts payable 12,200 increase

If Kensington uses IFRS reporting and the indirect method, what amount is their adjustments to reconcile net income to net cash provided by or (used in) operating activities?

a. 3,100 b. 49.500 c. 12,900 d. 10,500

6. During 2021, Orton Company earned net income of 384,000 which included depreciation expense of 78,000. In addition, the company experienced the following changes in the account balances listed below:

Increases Decreases

Accounts payable45,000 Accounts receivable12,000

Inventory36,000 Accrued liabilities24,000

Prepaid insurance33,000

Based upon this information what amount will be shown for net cash provided by operating activities for 2021?

a. 492,000 b. 465,000 c. 285,000 d. 267,000

7. Jarvis, Inc. reported net income of 34,000 for the year ended December 31, 2021 Included in net income were depreciation expense of 8,400 and a gain on sale of equipment of 1,700. Each of the following accounts increased during 2021:

Accounts receivable 2,200

Inventory 4,500

Prepaid rent 6,800

Available-for-sale investment 1,000

Accounts payable 5,000

What is the amount of cash provided by operating activities for Jarvis, Inc. for the year ended December 31, 2021?

a. 31,200 b. 33,900 c. 22,200 d. 32,200

8. Cashman Company reported net income of 255,000 for the year ended 12/31/2021. Included in the computation of net income were: depreciation expense, 45,000; amortization of a patent, 24,000; income from an investment in ordinary shares of Linda Inc., accounted for under the equity method, 36,000; and amortization of a bond premium, 9,000. Cashman also paid a 60,000 dividend during the year. The net cash provided by operating activities would be reported at:

a. 279,000 b. 231,000 c. 219,000 d. 171,000

9. The net income for the year ended December 31, 2021, for Oliva Company was1,200,000. Additional information is as follows:

Depreciation on plant assets 600,000

Amortization of leasehold improvements 340,000

Provision for doubtful accounts on short-term receivables 120,000

Provision for doubtful accounts on long-term receivables 100,000

Interest paid on short-term borrowings 80,000

Interest paid on long-term borrowings 60,000

Based solely on the information given above, what should be the net cash provided by operating activities in the statement of cash flows for the year ended December 31, 2021?

a. 2,260,000 b. 2,360,000 c. 2,340,000 d. 2,500,000

10. Soo Kwang Co. provided the following data for the preparation of cash flows for the current year:

Cash balance, beginning 1,500,000

Cash paid to purchase inventory 7,800,000

Cash received from sale of trading securities 2,500,000

Cash paid for interest in bank loan 450,000

` Cash paid to repay principal amount of bank loan 1,000,000

Cash collected from customers 10,000,000

Cash received from issuance of ordinary shares 1,200,000

Cash paid for dividends 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?

a. 1,900,000 b. 2,900,000 c. 2,350,000 d. 400,000

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

a. 3,000,000 b. 2,000,000 c. 1,800,000 d. 4,200,000

3.What is the cash balance at year end?

a. 3,400,000 b. 1,600,000 c. 1,400,000 d. 2,400,000