Question 1: The Big and Fast Company provides the following information about its activities in the

year 2016.
• Marketable securities purchased: 45,000
• Treasury stock purchased: 56,000
• Inventory purchased: 412,000
• Land sold: 95,000
• Machinery purchased: 278,000
• Common stock issued: 168,000
Compute net cash provided/used by investing activities to be reported in the statement of
cash flows of Big and Fast company.
Land Sold – 95,000
Machinery Purchased – (278,000)
Marketable Securities Purchased – (45,000)
TOTAL: (228,000)
Question 2: The P&G company provides the following information for the year 2016:
1. Old plant asset sold for 164,000 and the gain on such sale was of $5,000.
2. Treasury stock purchased for 42,000.
3. Investment purchased for 25,000.
4. A new plant asset purchased for 115,000.
5. Common stock issued for 375,000
Calculate net cash provided/used by investing activities for P&G company using above
information.
Old Plant Asset Sold – 164,000
Investment Purchased – (25,000)
New Plant Asset Purchased – (115,000)
TOTAL: 24,000
Question 3: The following information belongs to Alpha company:
• Accounts receivable on December 31, 2015: 62,000
• Accounts receivable on December 31, 2016: 70,000
• Allowance for doubtful accounts on December 31, 2015: 2,100
• Allowance for doubtful accounts on December 31, 2016: 3,200
• Sales for the year 2015: 155,300
• Sales for the year 2016: 126,500
The company sells goods on credit. For the year 2016, bad debts expense were 7,500 and accounts
amounting to 6,400 were written-off.
Find out the amount of cash collected from customer.
Account Receivable – 2015 – 62,000
Sales – 126,500
Total: 186,400
Accounts Receivable – 2016 – (70,000)
Write-offs – (6,400)
TOTAL: 112,100
Question 4: The Meta company uses indirect method for preparing its statement of cash flows. It
reported a net income of 100,000 for the year 2016.
During the year 2016, the working capital accounts were changed as follows:
• Increase in accounts receivable: 22,000
• Increase in accounts payable: 18,600
• Increase in inventory: 14,800
• Decrease in non-trade notes payable: 30,000
• Increase in available for sale securities: 32,000
The depreciation expense was 34,000 for the year 2016.
Compute net cash provided (used) by operating activities using indirect method.
Net Income – 100,000
Increase in Accounts Receivable – (22,000)
Increase in accounts payable – 18,600
Increase in Inventory – (14,800)
Depreciation – 34,000
TOTAL: 115,800
Question 5: The Beta company provides only the following information for the year 2016:
• Net loss: 35,000
• Increase in accounts receivable: 4,050
• Depreciation expense: 42,000
Compute net cash provided (used) by operating activities of Beta company
Net Loss – (35,000)
Increase in Accounts Receivable – (4,050)
Depreciation – 42,000
TOTAL: 2,950
Question 6: The following information have been taken from income statement and balance sheet of
Virginia Inc.
Income statement
• Net income: 192,500
• Depreciation expense: 62,500
• Amortization of intangible assets: 20,000
• Gain on sale of equipment: 45,000
• Loss on sale of investments: 17,500
Balance sheet:
• Accounts receivable on January 1, 2017: 190,000
• Accounts receivable on December 31, 2017: 167,500
• Inventory on January 1, 2017: 287,500
• Inventory on December 31, 2017: 251,500
• Prepaid expenses on January 1, 2017: 5,000
• Prepaid expenses on December 31, 2017: 11,000
• Accounts payable on January 1, 2017: 205,000
• Accounts payable on December 31, 2017: 189,500
• Accrued expenses payable on January 1, 2017: 77,500
• Accrued expenses payable on December 31, 2017: 90,000
Accounts payable given above relate to suppliers of merchandise.
Using above information, compute net cash flows from operating activities
A/R – 167,500 - 190,000 = (22,500)
Inv. – 251,500 - 287,500 = (36,000)
Prepaid Exp. – 11,000 - 5,000 = 6,000
A/P - 189,500 – 205,000 = (15,500)
Accrued Exp. – 90,000 – 77,500 = 12,500
Net Income – 192,500
Depreciation – 62,500
Amortization – 20,000
Gain on Sales – (45,000)
Loss on Sales – 17,500
A/R – 22,500
Inv. – 36,000
Prepaid Exp. – (6,000)
A/P – (15,500)
Accrued Exp. – 12,500
TOTAL: 297,000
Question 7:
SAN JOSE corp has the following data;
• Cash, beg is 200,000
• Account receivable, end is P 380,000
• Investment in Equity of 300,000 (no changes or movements during the year)
• Cash, end is 300,000
• Issuance of shares in exchange of land worth 900,000
• Cash Dividend declared of P 20,000
• Sold stocks for cash resulting to share premium of 30,000. Shares has a total par value of 100,000
• Bank loans of P 100,000 proceeds
• Payment of bank loans of 50,000
• Acquisition of machines on credit worth P 50,000
• Sale of equipment with BV of 60,000 for P 80,000 proceeds.
• Increase of receivables by 240,000
• Decrease of supplies of 5,000
• Increase of AP of 30,000
• Depreciation expense of 10,000
What is the company’s net income?
End, Cash – 300,000
Less: Beg., Cash – (200,000)
Net Increase in Cash – 100,000
Bank Loan – 100,000
Payment of Bank Loan – (50,000)
Issuance of Stocks – 130,000
Cash from Financing – 180,000
Proceeds from Sale of Equipment (Cash from Investing) – 80,000
Net Increase in Cash – 100,000
Less: Cash from Financing – (180,000)
Cash from Investing – (80,000)
Cash Used from Operating – (160,000)
Cash Used from Operating – (160,000)
Less: Depreciation Exp. – (10,000)
Increase in AP – (30,000)
Decrease in Supplies – (5,000)
Add: Increase in AR – 240,000
Gain on Sale of Equipment – 20,000
TOTAL: 55,000