Instructions
Read each question carefully and handwrite your answers on a yellow paper or short
bond paper. Show your solution to each problem-solving item. Do not forget to indicate
your name, subject, section code, unit number, and topic by following the format below:
Juan Dela Cruz
CONFRAS 144
UNIT 1 Financial Reporting Framework
Attach an image of your handwritten answer.
STRICTLY, HANDWRITE YOUR ANSWERS.
Also attach a copy of your Third Admission Slip.
Q1:
1. Cite and explain the three different activities involved in the Statement of Cash Flows.
2. Explain the peculiar treatment of interest income, interest expense, dividend income,
and dividend payments.
3. Explain the treatment of non-cash items PAS 7.
4. Which method of disclosing operating activities do you prefer?
Q2:
Identify and classify each transaction according to the type of activities to which they
respectively belong. Put a check mark on the corresponding boxes provided
CASH FLOW TRANSACTIONS
1. Proceeds from issuance of debt and equity instruments
2. Payments to acquire trading securities
3. Payments to acquire securities other than trading
securities
4. Payments to acquire PPE, intangibles and other longterm assets
5. Receipts from sale of goods and rendering of services
6. Payments to owners to acquire or redeem shares
7. Receipts from royalties, fees, commission and other
revenues
8. Payment for futures contracts and interests in joint
ventures
9. Payment to suppliers for goods and services
O
I
F
10. Cash advances and loans made by non-financial
entities
11. Cash advances and loans made by financial entities
12. Payments by a lessee for a finance lease liability
Income tax payments and refunds
O – Operating, I – Investing, F – Financing
Q3:
Davie504 provided the following data for the current year:
Cash balance, beginning of the year
₱
1,300,000.00
Cash flow from financing activities
₱
1,000,000.00
Total shareholders’ equity, end of the year
₱
2,300,000.00
Cash flow from operating activities
₱
400,000.00
Cash flow from investing activities
₱ (1,500,000.00)
Total shareholders’ equity, beginning of the year
₱
2,000,000.00
Cash received from customers
₱
8,700,000.00
Rent received
₱
100,000.00
Cash paid to suppliers and employees
₱
5,100,000.00
Taxes paid
₱
1,100,000.00
Cash dividends paid
₱
300,000.00
What is the cash balance at the end of the current year?
Q4:
Cold Fusion revealed the following information for the current year:
What is the net cash provided by operating activities for the current year?
Q5:
The Hooded Hood reported net income of P5,000,000 for the current year. Depreciation
expense was P1,900,000. The following are the changes in the working capital accounts:
Accounts receivable
₱ 1,100,000.00 increase
Non-trading equity investment
₱ 1,600,000.00 increase
Inventory
₱ 730,000.00 increase
Non-trade notes payable
₱ 1,500,000.00 increase
Accounts payable
₱ 1,220,000.00 increase
Under the indirect method, what net amount of adjustments is required to reconcile net
income to net cash provided by operating activities.
Q6:
Moon Moon provided the following transactions for the current year:
Cash borrowed from bank to purchase real estate
₱
5,500,000.00
Purchase of real estate for cash
₱
5,500,000.00
Sale of investment securities for cash
₱
5,000,000.00
Dividend paid
₱
6,000,000.00
Issuance of ordinary shares for cash
₱
2,500,000.00
Purchase of patent for cash
₱
1,250,000.00
Payment of bank loan
₱
1,500,000.00
Issuance of bonds payable for cash
₱
3,000,000.00
What amount should be reported as net cash provided by financing activities?
What amount should be reported as net cash used in investing activities?