CHAPTER 5 THE CASH FLOW STATEMENT PROBLEMS 5-1 Wilson Company Cash flows from operating activities: Net income before income tax 780,000 +1,820,000 P2,600,000 Adjustments for: Operating
Trang 1CHAPTER 5 THE CASH FLOW STATEMENT
PROBLEMS 5-1 (Wilson Company)
Cash flows from operating activities:
Net income before income tax 780,000 +1,820,000 P2,600,000 Adjustments for:
Operating income before working capital changes P3,240,000
5-2 (Bill Company)
Cash flows from operating activities:
5-3 (Bean Company)
(a) Indirect method
Cash flows from operating activities:
Adjustments for:
Operating income before working capital changes P300,000
(b) Direct method
Cash flows from operating activities:
0
5- 4
Trang 2Items that would be reported in the cash flow statement (indirect method)
1 Depreciation expense of P120,000 is added to net income before income
taxes
2 Net gain of P5,000 from sale of machine is deducted from net income
before income taxes (Gain of P9,000 from sale of machine A less loss of P4,000 from sale of machine B)
3 Under investing activities section, P29,000 is reported as a cash inflow
of sale of machine (27,000 from machine A plus P2,000 from machine B)
4 Under investing activities, P250,000 is reported as a cash outflow for
purchase of machine
5-5 Glad Company (Indirect method)
Glad Company Cash Flow Statement For year ended December 31, 2007 Cash flows from operating activities:
Adjustments for:
Operating income before working capital changes P870,000
Cash flows from investing activities:
Cash flows from financing activities:
5-6 (Alpha Company)
Alpha Company Cash Flow Statement For year ended December 31, 2007 Cash flows from operating activities:
Net income before income taxes P2,955,000
Adjustments for:
Operating income before working capital
Increase in accounts receivable (600,000)
Trang 3Cash flows from investing activities:
Proceeds from sale of plant assets P 800,000
Payments for purchase of plant assets (7,750,000)
Payments for purchase of investment in
Cash flows from financing activities:
Receipts from issuance of common stock P5,000,000
Direct method)
Alpha Company Cash Flow Statement For year ended December 31, 2007 Cash flows from operating activities:
Cash receipts from customers P5,400,000
Cash payments for salaries (1,980,000)
Cash payments for miscellaneous
expenses
(555,000) Cash generated from operations P2,734,000
Net cash from operating activities P2,254,000 Cash flows from investing activities:
Proceeds from sale of plant assets P 800,000
Payments for purchase of plant assets (7,750,000)
Payments for purchase of investment in
Cash flows from financing activities:
Receipts from issuance of common
stock
P5,000,000 Receipts from issuance of notes 6,000,000
5-7 (Ace Company)
Ace Company Cash Flow Statement For year ended December 31, 2007 Cash flows from operating activities:
Adjustments for:
Amortization of discount on bonds payable 50,000
Gain on sale of long-term investments (30,000)
Increase in accounts receivable (500,000)
Trang 4Increase in accounts payable 300,000
Increase in trading securities (100,000)
Cash flows from investing activities:
Purchase of property and equipment (1,900,000)
Net cash flows from investing activities (1,200,000)
Cash flows from financing activities:
Receipts from issuance of common stock P1,000,000
Purchase of equipment = 8,000,000 + 1,900,000 – 9,000,000 = 900,000
Depreciation expense = 2,200,000 + 400,0000 – 2,000,000 = 600,000
MULTIPLE CHOICE QUESTIONS Theory
Problems
MC21 D 870,000 + 10,000 – 510,000 – 110,000 = 260,000
MC22 C 4,380,000 + 216,000 – 304,000 = 4,292,000
MC23 C 550,000 –500,000 + 125,000 = 175,000
MC24 B 250,000 + 550,000 – 600,000 – 450,000 = 250,000
MC25 B 200,000 + 500,000 – 250,000 = 450,000
MC26 D 750,000 – 29,000 + 21,000 + 15,000 = 757,000
MC27 C 260,000+40,000=300,000; 400,000–300,000=100,000; 100,000
+120,000-102,000 = 280,000 MC28 D 3,200,000 + 400,000 – 2,500,000 = 1,100,000
MC29 C 690,000-35,000-80,000+250,000+10,000+25,000+80,000 = 940,000 MC30 D 1,100,000 - 150,000 – 135,000 = 815,000
MC31 A 220,000 + 325,000 – 240,000 = 305,000
,000;1,820,000+80,000-1,700,000=200,000;
430,000–200,000=230,000+30,000 = 260,000 MC33 B 149,000+17,000-13,000=153,000; 840,000+53,000-32,000=861,000 MC34 A 910,000-40,000+70,000+50,000 = 990,000
MC35 D 990,000 – 60,000 – 50,000 – 90,000 + 30,000 = 820,000
MC36 A 30,000 – 5,000 = 25,000
MC37 D 281,600 + 25,000 = 306,600
MC38 B 3,600,000 + 2,500,000 – 1,550,000 – 2,910,000 = 1,640,000
MC39 C 240,000 – 120,000 + 280,000 = 400,000
MC40 A 3,000,000+960,000–400,000=3,560,000;1,000,000+300,000–280,000
Trang 5=1,020,00; 3,560,000 – 1,020,000 = 2,540,000 MC41 B 380,000 + 160,000 = 540,000
MC42 C 1,200,000 + 1,000,000 – 300,000 = 1,900,000
MC43 B 8,000,000 – 7,200,000 + 150,000 + 20,000 + 18,000 = 988,000 MC44 A Acc Depreciation of equipment sold = 300,000 + 74,000 – 25,000 –
283,000 = 66,000 Cost of equipment sold = 66,000 + 100,000 = 166,000 Equipment purchased = 925,000 + 166,000 – 780,000 = 311,000 MC45 D Dividends declared = 500,000 + 1,000,000 – 710,000 – 20,000 =
770,000 Dividends paid = 22,000 + 770,000 – 34,000 = 758,000