Fundamentals of

Accountancy
Business and
Management 2

Quarter 1 – Module 7:
Preparing a Cash Flow
Statement
FABM2 – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 7: Preparing a Cash Flow Statement
First Edition, 2020

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Quarter 1 – Module 7:
Preparing a Cash Flow
Statement
Introductory Message
For the facilitator:

Welcome to the Fundamentals of Accountancy, Business and Management 2

Alternative Delivery Mode (ADM) Module on Preparing a Cash Flow Statement.

This module was collaboratively designed, developed and reviewed by educators both
from public and private institutions to assist you, the teacher or facilitator in helping
the learners meet the standards set by the K to 12 Curriculum while overcoming
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In addition to the material in the main text, you will also see this box in the body of
the module:

Notes to the Teacher

This contains helpful tips or strategies that
will help you in guiding the learners.

As a facilitator you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to manage
their own learning. Furthermore, you are expected to encourage and assist the
learners as they do the tasks included in the module.

For the learner:

Welcome to the Fundamentals of Accountancy, Business and Management 2

Alternative Delivery Mode (ADM) Module on Preparing a Cash Flow Statement.

The hand is one of the most symbolized part of the human body. It is often used to
depict skill, action and purpose. Through our hands we may learn, create and
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This module has the following parts and corresponding icons:

 What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in the
module.

What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.

What’s In This is a brief drill or review to help you link

the current lesson with the previous one.

What’s New In this portion, the new lesson will be

introduced to you in various ways such as a
story, a song, a poem, a problem opener, an
activity or a situation.

What is It This section provides a brief discussion of the

lesson. This aims to help you discover and
understand new concepts and skills.

What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.

What I Have Learned This includes questions or blank

sentence/paragraph to be filled in to process
what you learned from the lesson.

What I Can Do This section provides an activity which will

help you transfer your new knowledge or skill
into real life situations or concerns.

Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.

Additional Activities In this portion, another activity will be given

to you to enrich your knowledge or skill of the
lesson learned. This also tends retention of
learned concepts.

Answer Key This contains answers to all activities in the

module.

At the end of this module you will also find:

References This is a list of all sources used in developing
this module.

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
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We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!

This module was designed to help you demonstrate an understanding how to prepare
a Statement of Cash Flow that will equip you in solving exercises and problems in
the preparation of the report. The lessons are arranged to follow the standard
sequence of the course and according to the issued curriculum guide by the
department of education for senior high school students. Vocabularies and sample
problems are included in this module.
 Module
Preparing a Cash Flow Statement
7

What I Need To Know

In this lesson, you will learn the two methods of preparing the Cash Flow
Statement, the direct method and the indirect method. To be able to master the
required competency, you need to familiarize yourself first with these formats used
in preparing the report. Provided in this lesson are exercises and problems involving
preparation of Cash Flow Statement which will enable you to acquire the knowledge
and skill necessary in preparing such financial statement.

After going through this module, you are expected to:

1. Discuss the direct method and indirect method of preparing a Cash Flow
Statement;
2. Prepare a Cash Flow Statement using the direct method; and
3. Express the significance of cash flow statement as a tool for analyzing
how cash is effectively and efficiently managed by a business.

What I Know

In this part, let us see how much you know about the lesson by answering the
questions in pre-assessment below. If you obtain 100% or perfect score, skip the
module and immediately move to the next module. In the event you missed a point,
please proceed to the module as it will enrich your knowledge of preparing a Cash
Flow Statement. Let’s get started!

A. True or False
Direction: Write TRUE if the statement is correct and write FALSE if the statement
is incorrect. Write your answer in a separate sheet of paper.

1. Cash Flow Statement shows the sources and uses of cash of a business entity.
2. Cash Flow Statement is prepared at any point of the accounting period.
3. The investing activity components of the cash flow statement is reflected as the
first item in the Cash Flow Statement.
4. The ending balance of the Cash Flow Statement should tally with the ending
balance of cash ledger.
5. The cash inflow section of the Cash Flow Statement shows the different sources
where cash is obtained.
6. Operating activities involve transactions that affect the determination of profit or
loss of the business.
7. In determining the ending balance of the Cash Flow Statement, the beginning
balance of cash is subtracted from the net cash outflow from the three activities.
8. Among the four basic financial statements, Cash Flow Statement is the first
report to be prepared.
9. Knowledge of Cash Flow Statement preparation is helpful in acquiring skill in
financial statement preparation and reporting.
10. When inflow of cash exceeds the outflow of cash in the operating activities of the
business, the business is able to provide funds from its day-to-day activities.

B. Multiple Choice

Direction: Consider the data in the cash ledger below. Answer each question by
choosing the letter of the best answer. Write your answer in a separate sheet of paper.

Account Title: Cash Account Code: 101

Date Explanation Ref Dr Cr Balance
1/01/20 Beg. Balance ---
1/02/20 Investment GJ-1 P 250,000 P 250,000
1/05/20 Purchased equipment GJ-1 P 50,000 200,000
1/10/20 Proceeds of loan GJ-1 100,000 300,000
1/12/20 Purchased furniture GJ-1 20,000 280,000
1/15/20 Paid salaries GJ-1 5,000 275,000
1/18/20 Purchased supplies GJ-1 1,000 274,000
1/20/20 Purchased merchandise GJ-1 80,000 194,000
1/22/20 Sold merchandise GJ-1 50,000 244,000
1/25/20 Owner’s withdrawal GJ-1 10,000 234,000
1/27/20 Purchase merchandise GJ-1 120,000 114,000
1/29/20 Sold merchandise GJ-1 63,000 177,000
1/31/20 Paid salaries GJ-1 5,000 172,000
1/31/20 Paid rent GJ-1 3,000 169,000
1/31/20 Paid electricity expense GJ-1 500 168,500
1/31/20 Paid water expense GJ-1 250 168,250
1/31/20 Paid supplier GJ-1 75,000 93,250

1. What is the net cash flow from investing activities?

A. (P 50,0000) B. (P 60,000) C. (P 70,000) D. (P 80,000)
2. What is the net cash flow from operating activities?
A. (P 176,750) B. (P 186,750) C. (P 196,750) D. (P 206,750)
3. What is the net cash flow from financing activities?
A. P 310,000 B. P 320,000 C. 330,000 D. P 340,000
4. What is the total amount of cash inflow from all the activities?
A. P 462,000 B. P 463,000 C. P 464,000 D. P 465,000
5. What is the amount of total cash outflow?
A. P 369,750 B. P 370,750 C. P 371,750 D. P 372,750

What’s In

Before you proceed to this lesson, let us have some recalling of what you
studied in the first lesson which covered the discussion of the components and
structures of a Cash Flow Statement.

Direction: Describe each of the parts of the Cash Flow Statement:

Heading:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Operating Activities:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Investing Activities:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Financing Activities:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________

Discussion of the Activity

The Cash Flow Statement is presented with the items identified above. It starts
with the heading which consists of the name of the company, the name of the
statement and the accounting period at which it is prepared.

The items under operating activities are detailed in the section. This part
identifies the sources and uses of cash in the firm’s activities that affect the
determination of either income or loss.
 The investing activities provides the information on the firm’s undertaking
related to acquisition and disposal of long-term assets. They are investing items
because they are used primarily to conduct the operation of the business and to
accomplish its purpose in the long run.

The financing activities identifies the flows of the capital of the business. It
shows how it is secured and how it is disposed.

Knowledge of the components and structure of cash flow statement will equip
you in preparing the Cash flow Statement accurately. Preparation of Cash Flow
Statement is discussed in this lesson.

What’s New

Are you ready to discover how a Cash Flow Statement is being prepared? Try
to accomplish this activity first.

Direction: Using the information from Boxes 1 and 2, prepare a skeletal structure
of a cash flow of operating activities, investing activities and investing activities. Use
a separate sheet of paper in doing the activities.

Box 1:

Operating Activities Humphrey Enterprises Financing Activities

Cash Flows Statement
Investing Activities For the Period Ended Dec. 31, 2020 Cash Balance, End

Cash Balance, Beginning Net Increase/Decrease in Cash

Box 2:

Payment of salaries Investment of owner

Collection of accounts Payment of accounts
Purchase of equipment Sales of merchandise
Borrowing from banks Purchase of furniture
Payment of freight Investment of idle cash
Purchase of merchandise Sales of scrap materials
Payment of rent Purchase of supplies
Sales of old machine Purchase of vehicle
Withdrawal of owners Payment of insurance

Discussion of the Activity

The activity in the previous page serves as the preliminary part of discussing
the lesson on how to prepare a Cash Flow Statement. To make a successful and
accurate preparation of the report, you should master its structure and the
components of each section. The activity that you have fill-in is the exact format of
Cash Flow Statement that you are going to use.
The heading should be written at the top consisting of the company’s name,
the title of the statement and the period covered by the report.
The components of the Cash Flow Statement consists of the operating
activities, investing activities, ad financing activities. The net cash flow in each
activity is either net cash flow used or provided. It is used when outflows exceeds
inflows. It is provided if the cash inflow exceeds cash outflow.
After determining the amount of cash used or provided in each activity, all the
amounts will be added to get the net cash increase or decrease. The cash increase or
decrease in cash is added to the beginning balance of cash to get the cash ending
balance.
Knowing this preliminary knowledge on how to prepare the Cash Flow
Statement facilitate understanding of the lesson.

What Is It

Basically, there are four financial statements that are prepared at the end of
the accounting period. These reports are prepared in the following order: 1)
Statement of Comprehensive Income; 2) Statement of Changes in Equity; 3)
Statement of Financial Position; and 4) Statement of Cash Flow.
As you can see from the foregoing presentation, the Cash Flow Statement is
the last one that is prepared. This is because the report will draw its information
from the three aforementioned financial statements. The Statement of
Comprehensive Income provides the operating activities. The Statement of Changes
in Equity provides the financing activities while the Statement of Financial Position
provides the investing activities and the ending cash balance that should be reflected
in the Cash Flow Statement.
What you will discover in the presentation of discussion here is about the
preparation of the Statement of Cash Flow. The other three reports have already been
discussed in the previous lesson.

Preparing the Cash Flow Statement

There are two methods of preparing the Cash Flow Statement. Only, the direct
method is covered by this lesson.
The cash flow statement presented using the direct method is easy to
comprehend because it lists all of the major operating cash receipts and payments
during the period by source. In other words, it lists where the cash inflows come from
and where the cash outflows go.
 After all of the sources are listed, the total cash payments are then subtracted
from the cash receipts to compute the net cash flow from operating activities. Then
the cash used in or provided by the investing and financing activities are added or
subtracted to arrive at the net cash increase or net cash decrease.
Identifying the sources and uses of funds gives the financial statement user a
great deal of information on where receipts are coming from and where payments are
going to. This is one of the main advantages of the direct method compared with
the indirect method. Investors, creditors, and management can actually see where
the company is collecting funds from and whom it is paying funds to. The indirect
method involves a complicated process because it requires that non-cash
transactions should also be considered. There is a different format and system of
recognizing the business activities. That is why it is recommended that the direct
method should be used for better understanding of the financial users.
Presented next is an example of a cash flow statement prepared using the
direct method.

To start the preparation of the CFS, recall first your lesson previously where
you classified the items as to operating, investing or financing activities.
If you can still remember your lesson on T-account and normal balances, you
will see that assets have normal debit balances. Cash is an asset account. Therefore,
transactions that increase cash (ex. Cash receipts or collections) are recorded on the
debit side. It is credit, if the transaction decreases its balance (ex. Payments or
disbursements).
 A cash T-account in Table 1 is provided where the transactions affecting cash
are arranged in a chronological record. You can generate the Cash Flow Statement
by summarizing the transaction from the cash T-account and classifying these to the
different business activities.
The t-account is a symbolic representation of the ledger. It is an informal
ledger usually used by accountants to facilitate accounting works. You may use the
cash ledger, if it is available, as the reference of all cash transactions of the business.
It is important to note that the ending cash balance of cash in the cash flow
statement must tally with the balance of cash in the ledger or cash t-account at the
end of the period covered.
Table 1: T-account of Hero’s Company

Try to organize the above transactions as to classification of business

activities.
 With this arrangement of the cash transactions, you can now prepare the
Statement of Cash Flow as illustrated below.

This presentation of Statement of Cash Flow is the simplest way to prepare

but is not efficient and practical for you need to go through a thousand of transaction
in a year for the purpose of summarizing and classifying business activities.
So how is the SCF prepared? You need two SFP (current year and prior year)
and the current year SCI. With SFP, you will analyse the SFP accounts, excluding
non-cash transactions, to determine cash transactions. You have to limit the scope
to operating activities.
 Refer to Example 1- Collection from Customer and Example 2- Payment to
Supplies.

Example 1: Collection from Customer

December 31, 2020 December 31, 2019
Accounts Receivable P 20,000 P 20,000

December 31, 2020 Statement of Comprehensive Income revealed the following:

Credit Sales P 176, 300
Cash Sales 58, 000

Determine the collection from the credit sales and total collection from customers.

Let us begin with the analysis of the AR account. Recall that credit sales
increases AR because credit sales represent right to collect from the customers.
On the other hand, the right to collect AR is extinguished when customer pay their
accounts. Therefore, collections of receivables decrease AR. Following this, the
accounts receivable ending balance will be computed as follows:

Customer AR. End

Credit Sales
payments Balance

We get the beginning balance of AR from the December 31, 2020 SFP. The
December 31, 2021 SFP gives us the ending balance of AR. Moreover, we look at
the current year SCI to determine credit sales.

AR, Beg, Credit Sales AR. End

Balance Customer
P176, 300 payments Balance
P20,000 P 20, 000

Using this formula, we determine that customer payments amount to P 156,

300. However, this amount represents only the collection on credit sales. The
company also generated cash sales. Therefore, total collection is computed as
follows:

Collections from credit sales P 156, 300

Add: Receipts from cash sales 58, 000
Receipts from customers P 234, 300

The analysis above implies that when collection from customers is less than
credit sales, then the uncollected portion of credit sales increase AR. On the other
hand, when collection from customers is greater than credit sales, then the excess
must mean some of the beginning AR were collected leading to decrease in AR at the
of the year.

Example 2: Payment to Suppliers

December 31, 2020 December 31, 2019

 Inventory P 76, 000 P 40, 000
Accounts Payable 10, 000 6, 000

December 31, 2020 Income Statement revealed the following:

Cost of Goods Sold P 93, 000.00

Determine the amount paid to suppliers.

Answer
Let us begin with the analysis of the Inventory account. Recall that purchases
increase the Inventory account. On the other hand, Inventory is decreased when
good are sold. We refer to this as Cost of Goods Sold. Following this, inventory
ending balance is computed as follows;

Inventory Beg. Purchases Cost of Goods Inventory End

Balance sold Balance

We get the beginning balance of the Inventory from the December 31, 2019
SFP. The December 31, 2021 SFP gives us an ending balance of Inventory.
Moreover, we look at the current year SCI to determine Cost of Goods Sold.

Using the formula, we determine that Purchases amount to P 129, 000.

However, this is not necessarily the payment to supplier. So far, we know how
much we have purchased from the suppliers during the year. To determine the
amount we have paid to the suppliers, we need to look at the Accounts Payable.
Accounts Payable is the liability account that represents the claim of the
suppliers against the company. Purchases made during the year increase AP. On
the other hand, the supplier’s claim is extinguished when payment is made.
Therefore, payments to suppliers decrease AP. Following this, AP ending balance
is computed as follows;

We get the beginning balance of AP from the December 31, 2019 SFP. The
December 31, 2020 SFP gives us the ending balance of AP. We will use the amount
of inventory purchases computed in the previous section.
 Using the formula, we determine that payments to supplier amount to P 125,
000.

P 125, 000
Payment to Suppliers

( FABM2 RexBook Store Dani Rose C. Salazar)

From the analysis, it is deduced that AP increases when there are unpaid
portions of current year purchases such that payments to supplier is less than
purchases. On the other hand, payment to supplier is greater than purchases when
AP decreases which implies that some of the beginning AP must have been unpaid.
The indirect method is one of two accounting treatments used to generate
a cash flow statement. The indirect method uses increases and decreases in balance
sheet line items to modify the operating section of the cash flow statement from
the accrual method to cash method of accounting.
The indirect method presents the statement of cash flows beginning with net
income or loss, with subsequent additions to or deductions from that amount for
non-cash revenue and expense items, resulting in cash flow from operating activities.
Under the indirect method, the cash flow statement begins with net income
on an accrual basis and subsequently adds and subtracts non-cash items to
reconcile to actual cash flows from operations.
The indirect method is simpler than the direct method to prepare because
most companies keep their records on an accrual basis
(https://www.investopedia.com/terms/i/indirect_method.asp#:~:text=The%20indir
ect%20method%20presents%20the,cash%20flow%20from%20operating%20activiti
es).
Source: https://www.slideshare.net/hitesh447/cash-flow-statement-presentation
The cash flow statement primarily centers on the sources and uses of cash of
a company, and it is closely monitored by investors, creditors, and other
stakeholders. It offers information on cash generated from various activities and
depicts the effects of changes in asset and liability accounts on a company's cash
position.
A Cash Flow Statement is the examination of the financial report of the cash
inflows and cash outflows of the company. It helps the management in decision
making through the following ways :
1. It helps them to anticipate the future deficits in cash and hence help them to
make the financing decisions beforehand.
2. It helps them to establish a solid base for requesting credit.
3. It helps the management to make the decision whether to invest the cash
balances if positive in the capital market in order to generate an additional
source of income.
4. Cash flow analysis helps the management in making financial decisions such as
whether to add on the company's inventory or customers which needs cash.
 What’s More

INDEPDENENT ACTIVITY 1
Direction: Solve for the following word problems. Provide another sheet of paper in
presenting your solution.
1. The information on the table below is taken from the financial statement of RM
Company. Based on these information, compute the amount of cash that the
company had received from the customers.
December 31, 2020 December 31, 2019
Accounts Receivable P 145, 000 P 100, 000
Credit Sales P 312, 000
Cash Sales P 98, 000

2. Compute for the amount of cash that the company received from the customer
based from information taken from the financial statement of Pretty Me
Company.
December 31, 2020 December 31, 2019
Accounts Receivable P 55, 000 P 48, 000
Credit Sales P 56, 000
Cash Sales P 82, 000

3. The information below is taken from RM & M company’s financial statement.

Based from the presented information, compute for the amount of cash that the
company paid to suppliers.
December 31, 2020 December 31, 2019
Inventory P 123,500 P 89, 600
Accounts Payable P 34, 000 P 18,000
Cost of Goods Sold P 186, 000

INDEPDENENT ACTIVITY 2
Direction: Using the transactions in the cash ledger next page, group the items
according to business activities. Compute for the net cash flow in each business
activity. Write your answer in a separate sheet of paper.
INDEPDENENT ACTIVITY 3
Direction: Develop a ten-sentence essay. As you write your essay, consider this
question: “What do you think is the importance and purpose of preparing the
Statement of Cash Flow?” Write your essay in a separate sheet of paper. Consider
the rubrics below in the evaluation of your work.

Rubrics:
Ability to conceptualize 1-5
Depth of discussion 1- 5
Maximum Points 10

Scoring Rubrics:

Ability to conceptualize Depth of discussion

1 Provides non-concrete and non-
relevant concepts
2 Provides concrete but non-
relevant concepts
3 Provides concrete but partially
relevant concepts
4 Provides concrete and relevant
concepts
5 Provides more concrete and more
relevant concepts
1 Provides very non-substantial
information only
2 Provides non-substantial and
non-organized information
3 Provides substantial but not
organized information
4 Provides substantial and
organized information
5 Provides very substantial and very
organized information
INDEPDENENT ASSESSMENT
Direction: Write TRUE if the statement is correct and FALSE if the statement is
incorrect. Write your answer in a separate sheet of paper.

1. The cash inflow in each business activity describes how cash is used by the
business.
2. Payment of interest is an item under the financing activity section of the Cash
Flow Statement.
3. Sale of old fixed asset of the business is an item of investing activity section of the
Cash Flow Statement.
4. Payment of long term loan is an item of financing activity section of the Cash
Flow Statement.
5. Purchased of fixed assets is an item of financing activity section of the Cash Flow
Statement.
6. Additional investment of the owner increases cash flow of the operating activity
section of the Cash Flow Statement.
7. When the cash inflow is greater than the cash outflow, the business activities is
able to provide cash for the use of the business.
8. Payment of rent, salaries, water consumption, and electricity consumption
decreases the cash flow.
9. The Statement of Financial Position, cash ledger, and Cash Flow Statement
reflect the same ending balance of cash.
10. There is a direct connection among the Statement of Financial Position,
Statement of Changes in Equity, Statement of Comprehensive Income and Cash
flow Statement.

What Have I Learned

Based from the discussion of the lesson and from the activities provided in
this module, provided your insights gained by completing the statements below:
I understand that _________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
I realize that ______________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________

What I Can Do

Direction: Using the same transactions used in Independent Activity 2, prepare the
Cash Flow Statement using the direct method. Write your answer in a separate sheet
of paper.

Assessment
A. True or False
Direction: Write TRUE if the statement is correct and write FALSE if the statement
is incorrect. Write your answer in a separate sheet of paper.

1. The cash inflow section of the Cash Flow Statement shows the different sources
where cash is obtained.
2. Among the four basic financial statements, Cash Flow Statement is the first report
to be prepared.
3. Knowledge of Cash Flow Statement preparation is helpful in acquiring skill in
financial statement preparation and reporting.
4. Cash Flow Statement shows the sources and uses of cash of a business entity.
5. The investing activity components of the cash flow statement is reflected as the
first item in the Cash Flow Statement.
6. The ending balance of the Cash Flow Statement should tally with the ending
balance of cash ledger.
7. Operating activities involve transactions that affect the determination of profit or
loss of the business.
8. In determining the ending balance of the Cash Flow Statement, the beginning
balance of cash is subtracted from the net cash outflow from the three activities.
9. When inflow of cash exceeds the outflow of cash in the operating activities of the
business, the business is able to provide funds from its day-to-day activities.
10. Cash Flow Statement is prepared at any point of the accounting period.

C. Multiple Choice

Direction: Consider the data in the cash ledger below. Answer each question by
choosing the letter of the best answer. Write your answer in a separate sheet of paper.

Account Title: Cash Account Code: 101

Date Explanation Ref Dr Cr Balance
1/01/20 Beg. Balance ---
 1/02/20 Investment GJ-1 P 250,000 P 250,000
1/05/20 Purchased equipment GJ-1 P 50,000 200,000
1/10/20 Proceeds of loan GJ-1 100,000 300,000
1/12/20 Purchased furniture GJ-1 20,000 280,000
1/15/20 Paid salaries GJ-1 5,000 275,000
1/18/20 Purchased supplies GJ-1 1,000 274,000
1/20/20 Purchased merchandise GJ-1 80,000 194,000
1/22/20 Sold merchandise GJ-1 50,000 244,000
1/25/20 Owner’s withdrawal GJ-1 10,000 234,000
1/27/20 Purchase merchandise GJ-1 120,000 114,000
1/29/20 Sold merchandise GJ-1 63,000 177,000
1/31/20 Paid salaries GJ-1 5,000 172,000
1/31/20 Paid rent GJ-1 3,000 169,000
1/31/20 Paid electricity expense GJ-1 500 168,500
1/31/20 Paid water expense GJ-1 250 168,250
1/31/20 Paid supplier GJ-1 75,000 93,250

1. What is the net cash flow from financing activities?

A. P 310,000 B. P 320,000 C. 330,000 D. P 340,000
2. What is the net cash flow from investing activities?
A. (P 50,0000) B. (P 60,000) C. (P 70,000) D. (P 80,000)
3. What is the amount of total cash outflow?
A. P 369,750 B. P 370,750 C. P 371,750 D. p 372,750
4. What is the net cash flow from operating activities?
A. (P 176,750) B. (P 186,750) C. (P 196,750) D. (P 206,750)
5. What is the total amount of cash inflow from all the activities?
A. P 462,000 B. P 463,000 C. P 464,000 D. P 465,000

Additional Activities

Direction: Surf the Internet or use any available source to find an example of cash
ledger. Using the items in the cash ledger, Prepare a Cash flow Statement. Present
your work on a separate sheet. Attach the copy of the cash ledger. Consider the
provided rubrics in the evaluation of your work.
Rubrics:

Comprehensiveness of the information 15

Accuracy of classification 15
Maximum Points 30

Scoring Rubrics:

Points Comprehensiveness of the Information

 5 Provides at least 10 items
10 Provides 11 - 15 items
15 Provides 16 and items and above
Accuracy of Classification
5 Accurately classified 50% and below the listed items
10 Accurately classified 51% - 90% the listed items
15 Accurately classified at leas 91% the listed items

Answer Key

What I Know Assessment Independent

A. A. Assessment
1. TRUE 1. TRUE
2. FALSE 2. FALSE 1. FALSE
3. FALSE 3. TRUE 2. FALSE
4. TRUE 4. TRUE 3. TRUE
5. TRUE 5. FALSE 4. TRUE
6. TRUE 6. TRUE 5. FALSE
7. FALSE 7. TRUE 6. FALSE
8. FALSE 8. FALSE 7. TRUE
9. TRUE 9. FALSE 8. TRUE
1O. TRUE 1O. FALSE 9. TRUE
1O. TRUE
B. B.
1. C 1. D
2. A 2. C Independent
3. D 3. A Activity 1
4. B 4. A
5. A 5. B 1. P 365,000

2. P 131,000

3. 185,000

Independent Activity 2
Operating Activities:
1/07 Cash From sales P 89,000
1/23 Collection of AR 28,000
1/06 Cash from sale 12,000
3/15 Cash from sales 28,000
4/11 Collection of AR 42,000
5/18 Cash from sales 19,900
10/15 Collection of AR 80,000
Independent Activity 2
Jensen’s Company
Cash Flow Statement
For the Period Ending January 31, 2020

Cash Flow from Operating Activities:

Cash from sales P 148,900
Collection of AR 150,000
Payment to supplier (111,000)
Payment of operating expenses (72,000)
Interest payment (6,200)
Net Cash Provided by Operating Activities P 109,700

Cash Flow from Investing Activities:

Acquisition of computer P (56,000)
Acquisition of equipment (18,000)
Net Cash Used in Investing Activities P (74,000)

Cash Flow from Financing Activities:

6/24 Additional contribution P 230,000
8/03 Proceeds from bank loans 120,000
12/31 Loan payment (23,000)
12/31 Owner’s withdrawal (15,000)
Net Cash Provided by Financing Activities P 312,000
Net Increase in Cash 347,700
Add: Cash Balance, Beg. 530,000
Cash Balance, End. P 877,700
=============

References:
Cash Flow Statement. 2020. slideshare.net, accessed May 20, 2020,
https://www.slideshare.net/hitesh447/
Dani Rose C. (2016). Fundamentals of Accountancy, Business and Management 2.
Manila: Rex Book Store, Inc.
Understanding the Direct Method. 2020. investopedia.com, USA, accessed MAY 20,
2020, https://www.investopedia.com/terms/

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