Problem 1

Procedures / Instructions Identify which of the following transactions fall under operating, investing and financing activities:

a. Cash received from customers _______________________

b. Cash paid to suppliers _______________________

c. Cash paid to employees _______________________

d. Cash paid to purchase equipment _______________________ (company does not sell equipment)

e. Cash received from sale of furniture _______________________ (company's main line of business is not related to furniture)

f. Depreciation expense _______________________

g. Sale of goods on credit _______________________

h. Purchase of goods on credit _______________________

i. Cash received from getting a loan from a bank _______________________

j. Cash paid to owners _______________________

Problem 2

My Hero Academia store had the following transactions during the year:

a. Purchase of goods. Paid cash. 100,000

b. Sale of goods. Received cash. 150,000

c. Paid utilities 30,000 d. Paid rent 10,000

e. Sold equipment for cash 100,000

f. Owner withdraws investment 10,000

Required:

1.Compute for the net cash flow generated by/used in operating activities.

2. Using the given above, compute for the net cash flow generated by/used in investing activities.

3. Using the given above, compute for the net cash flow generated by/used in financing activities.

4. Using the given above, prepare Cash Flow Statement. (Direct Approach)

Problem 3

1. The company presented the following in order to aid the accountant in preparing the CFS:

a. Net income: P200,000

b. Depreciation expense : P 25,000

c. Gain on sale of property and equipment: P100,000

d. Decrease in trade and other receivables: P 70,000

e. Purchase of property and equipment: P200,000

f. Payment of loan from bank: P150,000

The net the cash generated/provided in financing activities

a. 175,000

b. 180,000

c. 150,000

d. 100,000

2. KATSUKI BAKUGO Company provided the following information for the year ended December 31,2018

Cash collections from customers P6,000,000

Cash payments to suppliers 2,000,000

Cash payment to employees 800,000

Interest received 100,000

Interest payment on the bank loan 300,000

Cash dividends received 300,000

Cash dividends paid 400,000

Income tax paid 200,000

Cash payment for equipment 1,500,000

The net cash provided by operating activities for 2018 would be:

a.2,700,000

b.3,000,000

c.3,100,000

d.1,200,000

3. The following changes happened in some accounts of IZUKU MIDORIYA Company as follows:

Increase in Machinery P375,000

Increase in depreciation -machinery 600,000

Increase notes payable 450,000

Increase in investment in bonds 500,000

Increase in bonds payable 300,000

Additional information:

1.The net income for the period was P 4,000,000

2.In November of the current year, the company sold the machinery costing P375,000 with accumulated depreciation of P180,000 at a loss of P25,000.

3. In the month of December, the company purchased machinery costing P750,000 through the issuance of a 12% note payable of P450,000 and P300,000 cash.

The net cash flows used by investing activities would be

a.830,000

b.800,000

c.1,080,000

d.605,000

Problem 4

Compute and answer

1.Nanno Trading presented the following selected from its financial statements.

Cash and cash equivalents 500,000

Trading Securities 1,000,000

Inventorty 2,500,000

Total Current assets 5,000,000

Total Assets 15,000,000

Trade and other payables 800,000

Total Liabilities 6,000,000 Net Sales 8,000,000

Operating Expenses 2,200,000

Income after tax 960,000

1.On a common size statement of financial position, how would the company present the trading securities?

A. 5.05% C. 20.0% B. 6.7% D. 25.6% Solution:

2. Using the same data in above, how would the company present the trade and other on a common size statement of financial position.

A. 13.3% C. 5.3% B. 10.0% D. 4.0% Solution:

3. Using the same data in above, how would the company present the operating expenses on a common-size income statement?

A. 11.0% C. 25.5% B. 14.7% D. 229.0% Solution:

2. Selected items in the statement of comprehensive income of The Gifted Trading are as follows:

Sales 3,675,000

Sales Discounts 175,000

Office Supplies 52,500

Advertising Expense 71,000

Utilities Expense 177,500

Interest Expense 35,000

The gross profit of the company is 40% of the net sales. And the applicable tax rate for the period is 30%.

1. In the common size statement of comprehensive income, sales discounts and allowances will have a proportional percentage of?

A. 4.75% C. 4.55% B. 5.00% D. 95.23% Solution:

2. Using the same data above, office supplies will appear in the common size statement of comprehensive income as:

A. 1.43% C. 1.50% B. 1.46% D. 2.5% Solution:

3. Using the same data above, the proportional percentage of interest expense in the statement of comprehensive income would be:

A. 1.00% C. 0.91% B. 0.95% D. 1.15% Solution:

4. Using the same data above, the business expects to allocate 8% proportional components for salaries and wages in the common size statement of comprehensive income, the absolute amount for salaries and wages would be.

A. 280,000 C. 308,000 B. 294,000 D. 176,400 Solution:

3.Analyzed the following data. Answer and prepared the following required ask:

The statement of Comprehensive Income of The Gifted Trading for the year ended December 31,2019 is presented for you to prepare the following:

a) Common size Statement of Comprehensive Income (Vertical Analysis).

b) Interpretation of the relationship of each item to Net Sales.

The Gifted Trading

Sales P63,000

Less: Sales Returns & Allowances 3,000

Net Sales P60,000

Less: Cost of Sales 45,000

Gross Profit 15,000

Less: Operating Expenses 12,000

Profit P 3,000

Problem 5

The Statement of Comprehensive income of the Bad Genius Jewelry Store is presented below:

November December

Sales P90,000 P100,000

Less: Sales Returns & Allowances 2,000 1,000

Sales Discount - 500

2,000 1,500

Net Sales P88,000 P98,500

Less: Cost of Sales 50,000 45,000

Gross Profit 38,000 53,500

Less: Operating Expenses 20,000 19,000

Profit P18,000 P34,500

1.Analyzed the above comparative statement of comprehensive income using the horizontal analysis. Show both the amount of increase /decrease and the percent of changes.

2.Explain the significance of the changes in the amounts and percentages.

3. Evaluate the result of December operations are compared with November.