ONE CAINTA COLLEGE

BOOKKEEPING
FINAL EXAMINATION
(CASH FLOW)

1. The B and F 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
Required: Compute net cash provided/used by investing activities to be reported in the
statement of cash flows of B and F company.

2. The P&G company provides the following information for the year 2016:
Old plant asset sold for 164,000
and the gain on such sale was of 5,000
Treasury stock purchased for 42,000
Investment purchased for 25,000
A new plant asset purchased for 115,000
Common stock issued for 375,000
Required: Calculate net cash provided/used by investing activities for P&G company using
above information.

3. The following activities were performed by L&M corporation during the year 2015.
Treasury stock purchased: 35,000
Accounts payable paid: 585,000
Note receivable collected: 50,000
Dividends paid: 190,000
Bonds payable issued: 340,000
Common stock issued: 175,000
Required: Compute net cash provided/used by financing activities to be reported in the
statement of cash flows of L&M corporation.

4. The L company uses direct method to prepare its statement of cash flows and wants your
assistance in computing the total cash paid to suppliers of inventory during the year 2016. The
company presents you the following information about its inventory, accounts payable and cost of
goods sold for the year 2016:
Inventory on January 1, 2016: 40,000
Inventory on December 31, 2016: 75,000
Accounts payable on January 1, 2016: 22,000
Accounts payable on December 31, 2016: 35,000
Cost of goods sold for the year 2016: 350,000
Required: Calculate total cash paid to suppliers of inventory by Lucky company during the year
2016.

5. Consider the following information of a company:

Sale of common stock: 880,000
Sale of preferred stock: 120,000
Payment of dividends: 156,000
Purchase of treasury stock: 965,000
Required: Compute net cash provided/used by financing activities using above information.

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6. The Metro company’s cost of goods sold for the current year is 145,000. The beginning and
ending balances of its merchandise inventory and accounts payable are given below:
Merchandise inventory at the beginning of the year: 40,000
Merchandise inventory at the end of the year: 32,000
Accounts payable at the beginning of the year: 29,000
Accounts payable at the end of the year: 15,000
Required: Compute the total cash paid to suppliers of inventory during the period using above
information.

7. Consider the following information of a merchandising company for the year 2016:
Inventory on January 1, 2016: 40,000
Inventory on December 31, 2016: 75,000
Accounts payable on January 1, 2016: 22,000
Accounts payable on December 31, 2016: 35,000
Cost of goods sold for the year 2016: 350,000
Required: Calculate total cash paid to suppliers during year 2016 by preparing t-accounts.

8. A company provides the following data for the current period:

Inventory at the start of the period : 40,000
Inventory at the end of the period: 32,000
Accounts payable at the start of the period: 29,000
Accounts payable at the end of the period: 15,000
The cost of goods sold (COGS) for the current period is 145,000
Required: Compute the amount of cash paid for the purchase of merchandise inventory during
the period using t-accounts approach.

9. The Alpha company prepares its statement of cash flows using direct method. It requests you to
calculate cash received from customers during the year 2016. For this purpose, the following
information has been extracted from the trial balance of the company. 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.

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
Required: Compute cash received from customers to be reported in the statement of cash
flows for the year 2016.

10. The following information belongs to W company:

The bad debts expense was 7,800 and write-offs totaled to 7,250 during the year 2015. All
sales are made on credit.

Accounts receivable on December 31, 2015: 90,000

Accounts receivable on December 31, 2016: 75,000
Allowance for doubtful accounts on December 31, 2015: 3,550
Allowance for doubtful accounts on December 31, 2016: 4,100
Sales for the year 2015: 346,500
Sales for the year 2016: 225,300
Required: Compute total amount of cash received from customers by W company during the
year 2015.

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11. 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
Required: Compute net cash provided (used) by operating activities using indirect method.

12. 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
Required: Compute net cash provided (used) by operating activities of Beta company using
indirect method.

13. The following information have been taken from income statement and balance sheet of V Inc.
Accounts payable given above relate to suppliers of merchandise.

Income statement Balance sheet:

Net income: 192,500 Accounts receivable on January 1, 2017: 190,000
Depreciation expense: 62,500 Accounts receivable on December 31, 2017: 167,500
Amortization of intangible 20,000 Inventory on January 1, 2017: 287,500
assets:
Gain on sale of equipment: 45,000 Inventory on December 31, 2017: 251,500
Loss on sale of investments: 17,500 Prepaid expenses on January 1, 2017: 5,000
192,500 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, 77,500
2017:
Accrued expenses payable on 90,000
December 31, 2017
Required: Using above information, compute net cash flows from operating activities under
indirect method.

14. The P corporation earned a net income of 15,500 for the year 2017. It also provides you the
following information about dividends payable and retained earnings accounts at the end of the
year 2016 and 2017.
Dividends payable on December 31, 2016: 2,500
Dividends payable on December 31, 2017: 4,000
Retained earnings on December 31, 2016: 45,500
Retained earnings on December 31, 2017: 52,000
Required: Compute cash paid for dividends during the year 2017. How P Corporation would
report this payment on its statement of cash flows for the year 2017?

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15. The income statement of VG company for the year ended December 31, 2017 is given below:
Sales 1,725,000
Cost of goods sold: 475,000
Beginning inventory 1,100,000
Purchases 1,575,000
Goods available for sale 400,000
Ending inventory 1,175,000
Gross profit 550,000
Operating expenses 112,500
Selling expenses 175,000
Administrative expenses 287,500
Net income 262,500
The following additional information is also provided to you:
The depreciation expense of 15,000 is included in the administrative expenses shown in the above
income statement.
Accounts receivable decreased by 90,000 during the year.
Accounts payable decreased by 68,750 during the year.
Prepaid expenses increased by 42,500 during the year.
Accrued expenses decreased by 25,000 during the year.
You are requested to compute the net cash flow from operating activities of VG Company using
income statement and additional information given above.

16. (Preparation of statement of cash flows). The income statement and comparative balance sheet of
Edison Corporation is given below:

During the year 2017, a dividend of 130 was declared and paid by management of Edison
Corporation. Some plant assets were purchased during 2017 and the payment was settled by issuing
common stock amounting to 35.

E Corporation E Corporation
Income Statement Comparative Balance Sheet
For the Year Ended December 31, 2017 As of December 31, 2017 and 2016
Sales 3,450 Assets 2017 2016
Cost of goods sold 2,350 Cash and cash equivalents 900 575
Gross profit 1,100 Account receivable 875 650
Selling and administrative 465 Inventory 800 950
expenses
Other revenues and gains Plant assets 950 850
Gain on sale of investments 40 Accumulated depreciation (600) (585)
Income before tax 675 Long-term investments 650 710
Net income 405 Total 3,575 3,150
Liabilities and Capital
Accounts payable 600 450
Accrued liabilities 100 125
Bonds payable 700 775
Capital stock 950 850
Retained earnings 1,225 950
Total 3,575 3,150

Required: Using the data given above, prepare statement of cash flows of Edison Corporation using
indirect method.

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