1. In 2011, a typhoon completely destroyed a building belonging to Carpet Corporation.

The building cost Php 2,500,000 and had accumulated depreciation of Php 1,200,000 at the time of the loss. Carpet received a cash settlement from the insurance company and reported a loss of Php 525,000. In Carpet's 2011 cash flow statement, how much would be the net changes that would be reported in the cash flows from investing activities section?

SOLUTION: Book Value of Building Cost Less: Accumulated Depreciation Less: Amount of Loss Cash received from insurance company (Inflow-investing activity) Php 2,500,000 Php 1,200,000 Php 1,300,000 Php 525,000

Php 775,000 increase

2011 Increase in accrued interest (50000 – 40000) Increase in prepaid expense (4940 – 3100) 75. 12-31-10 Accrued interest payable recognized Depreciation expense recognized Prepaid expense recognized P 40. 100 12-31-11 P 50. 2011. 600 4. 000. 2011. 000 CASH PROVIDED BY OPERATING ACTIVITIES P 731. 000 75.2. 600 10. 940 For the year ended December 31. 760 . 800 3. 000 72. 000 (1840) P 648. Darwin Company reported a net income after tax of P 648. What is the net cash flow for operating activities that would be shown in the cash flow statement? SOLUTION: NET INCOME FOR 2011 Adjustment: Depreciation expense. Darwin Company provided the following relevant information involving its operating activities for the year ended December 31.

Sold an investment in Water for P350. 000 4. Inc.  Acquired a P500. interest of 37500 was paid to Goldfish). 000 when the carrying value was P330. Additional data follow: Purchase of plant assets Depreciation of plant assets Net decrease in non-cash current assets Dividends declared on plant assets Loss on sale of equipment 2.  Collected dividends of 12000 on available for sale investment. 000.800. In Goldfish Corporation’s 2011 statement of cash flows.480.000 1.000 130.000.000 970. 4-year certificate of deposit from a bank (during the year.000 290. for P260.000 .520. Goldfish company had the following activities during 2011:   Acquired 2000 shares of stock in starfish.3. 000. 000. how much should be the net cash used in investing activities? SOLUTION: Acquisition of 2000 shares of stock in starfish Sale of investment in Water Acquisition of a 4-year certificate of deposit (260000) 350. 2011 for Knot Corporation was 3. 000 (500000) NET CASH FLOW USED IN INVESTING ACTIVITIES P 410. The net income for the year ended December 31.

000 decrease 150.What amount should be the cash provided from operating activities in Knot’s statement of cash flows for the year ended December 31.520.000 increase 50.000 130.000 decrease In 2011 statement of cash flows.000 for 2011.000 1.000. 2011? SOLUTION: Net Income Depreciation of plant assets Net decrease in non-cash current assets Loss on sale of equipment Cash provided from operating activities 3. caused by major repair of equipment Deferred tax liability 200.480.000 increase 400.000 5.000 290. how much should be reported as net cash provided by operating activities? . Bargain Company reported net income of 3. carried @ equity Premium on bonds payable Accumulated Dep’n. Changes occurred in several balance sheet accounts during 2011 as follows: Investment in associate.000 5.420.

000.SOLUTION: Net Income Increase in investment in associate Decrease in premium on bonds payable Increase in deferred tax liability 3.000) (50.000) 150.000 .000 Net cash inflow – operating activities 2.000 (400.700.