ABM 2: FUNDAMNETALS OF ACCOUNTING, BUSINESS AND MANAGEMENT 2

UNIVERSITY OF CEBU – BANILAD CAMPUS

SENIOR HIGHSCHOOL DEPARTMENT
Miss Kimberly Nicanor

NAME: DATE:
STRAND & SECTION: SCHEDULE:
SUBJECT TOPIC: WORKSHEET #:

QUIZ # 3 – SCF

Test I – Multiple Choice

Encircle the letter of your answer.

1. The primary purpose of a statement of cash flows is

A. To provide relevant information about the cash receipts and cash payments of an
entity during a period.
B. To help investors and creditors to assess the entity's ability to generate positive future
cash flows.
C. To disclose separately noncash transactions.
D. To assess the ability of the entity to pay dividends.

2. Cash equivalents are

A. Short-term highly liquid investments that are readily convertible to known amount of
cash
B. Investments subject to an insignificant risk
C. Short term highly liquid investments that are readily convertible to known amount of
cash and which are subject to an insignificant risk of change in value
D. Long-term highly liquid investments that are readily convertible to known amount of
cash
3. Interest payments to lenders and other creditors should be classified as cash outflows for
A. Operating activities
B. Borrowing activities
C. Lending activities
D. Financing activities
4. An entity shall report cash flows from operating activities using
A. Direct method
B. Indirect Method
C. Either direct method or indirect method
D. Neither direct method or nor indirect method
5. Bank borrowings are generally considered
A. Operating Activities
B. Investing Activities
C. Borrowing Activities
D. Financing Activities
6. Cash flows arising from the purchase and sale of non-current assets are
A. Classified as operating activities
B. Classified as investing activities
C. Classified as financing activities
D. Not reported in the statement of cash flows
7. Cash flows derived from the equity capital and borrowing of the entity.
A. Operating Activities
B. Investing Activities
C. Financing Ativities
D. Equity Activities
8. How should a gain from the sale of equipment for cash be reported using the indirect method?
A. In investing activities as a reduction of the cash inflow
B. In investing activities as a cash outflow
 ABM 2: FUNDAMNETALS OF ACCOUNTING, BUSINESS AND MANAGEMENT 2
UNIVERSITY OF CEBU – BANILAD CAMPUS
SENIOR HIGHSCHOOL DEPARTMENT
Miss Kimberly Nicanor

C. In operating activities as an additional to income

D. In operating activities as a deduction from income
9. Which of the following cash flows does not appear in the statement of cash flows using
the indirect method?
A. Net cash flow from operating activities
B. Cash received from customers
C. Cash inflow from sale of equipment
D. Cash outflow for dividend payment

TEST II – PROBLEM SOLVING. Write your answer in the space provided. Don’t forget the peso
sign. WRITE YOUR SOLUTIONS IN A YELLOW PAPER & DOUBLE RULE YOUR FINAL ANSWER.

10. Star Company provided the following information for the current
year:
December 31 January 1
Cash P 1,500,000 P 1,000,000
Retained earnings 7,000,000 5,400,000
Cash flow from operating activities ?
Cash flow from investing activities ( 4,800,000)
Cash flow from financing activities 1,800,000
Dividends declared and paid 2,000,000
Net Income 3,600,000

What amount should be reported as cash flow from operating activities?___________________________

11. Moon Company provided the following data for the preparation of the statement of cash flows for
the current year:
Increase in accounts receivable P 300,000
Decrease in income tax payable 170,000
Depreciation 1,000,000
Net Income 250,000
Gain on sale of equipment 440,000
Loss on sale of building 210,000

Using the indirect method, what amounts should be reported as net cash flow from the
operating activities?__________________________________________________________________

12. Sand Company provided the following information for the current year:
Cash received from customers P 8,700,000
Rent received 100,000
Cash paid to suppliers and employees 5,100,000
Taxes paid 1,100,000
Cash dividend paid 300,000

What was the net cash provided by operations for the current year?_________________________
 ABM 2: FUNDAMNETALS OF ACCOUNTING, BUSINESS AND MANAGEMENT 2
UNIVERSITY OF CEBU – BANILAD CAMPUS
SENIOR HIGHSCHOOL DEPARTMENT
Miss Kimberly Nicanor

13. Paradise Company reported net income of P 750,000 for the current year. The entity provided
the following account balances for the preparation of statement of cash flows for the current
year:

December 31 January 1
Accounts receivable P 145,000 P 115,000
Allowance for uncollectible accounts 5,000 4,000
Prepaidrentexpense 41,000 65,000
Accounts payable 112,000 97,000

What is the net cash provided/used by operating activities for the current year?
_______________________________________________________________________________________________

Reveluv Company provided the following data for the current year:

Gain on sale of equipment P 60,000

Proceeds from sale of equipment 100,000
Purchase land on cash 1,800,000
Amortization of bond discount 20,000
Dividend declared 450,000
Dividends paid 380,000
Additional investment of the owner 750,000

14. What is the net cash provided by financing activities?_________________________________________

15. What is the net cash used in investing activites?______________________________________________

Shine Company used the direct method to prepare the statement of cash flows. The entity had the
following cash flows during the current year:

Proceeds from BPI bank P 4,000,000

Cash receipts from customers 2,000,000
Sales on account from customers 1, 750,000
Cash receipts from dividends 300,000
Cash receipts from repayment of loan made to another entity 2,200,000
Payments for wages and other operating expenses 1,200,000
Paid for insurance 100,000
Paid for dividends 200,000
Machinery withdrawal of the owner 250,000
Payments for taxes 400,000
Acquire land for use of the business 800,000
Cash balance - beginning 3,500,000

16. What is the net cash provided by operating activities?_________________________________________

17. What is the net cash provided by investing activites?__________________________________________
18. What is the net cash provided by financing activites?__________________________________________
19. What is the cash balance at year end?________________________________________________________