MEC 42- PRACTICE SET – CASH FLOW STATEMENT
A. BLACKPINK Company uses the direct method to prepare its statement of cash flows. The
company had the following cash flows during 2022:
Cash receipts from the issuance of ordinary shares
400,000
Cash receipts from customers
200,000
Cash receipts from dividends on long-term investments
30,000
Cash receipts from repayment of loan made to
220,000
another entity
Cash payments for wages and other operating expenses
120,000
Cash payments for insurance
10,000
Cash payments for dividends
20,000
Cash payments for taxes
40,000
Cash payment to purchase land
80,000
1. The net cash provided by (used in) operating activities is?
2. The net cash provided by (used in) investing activities is?
3. The net cash provided by (used in) financing activities is?
B. JENCHULICHAENG Co. had the following information during 2022:
Accounts receivable, January 1, 2022
Accounts receivable, December 31, 2022
Sales on account and cash sales
Bad debts expense
Accounts payable, January 1, 2022
Accounts payable, December 31, 2022
1,200
800
16,000
400
700
400
Cost of sales
8,000
Increase in inventory
1,800
Operating expenses on accrual basis
2,440
Increase in accrued payables for operating expenses
820
Decrease in prepaid operating expenses
780
Property, plant, and equipment, January 1, 2022
Property, plant, and equipment, December 31, 2022
3,600
5,400
Additional information:
a.
There were no write-offs of accounts receivable during the year.
b.
Equipment with an accumulated depreciation of ₱400 was sold during the year for
₱240 resulting to a gain on sale of ₱30.
Requirements: Compute for the following:
(a) cash receipts from customers,
(b) cash payments to suppliers,
(c) cash payments for operating expenses, and
(d) cash payments for acquisition of property, plant, and equipment.
C. BLINK Co. has the following information as of December 31, 2022:
Jan. 1
Dec. 31
Accounts receivable
8,000
10,000
Allowance for bad debts
(200)
(500)
Prepaid rent
1,920
1,600
Accounts payable
3,400
4,400
BLINK reported profit of ₱4,400 for the year, after depreciation expense of ₱100, gain
on sale of equipment of ₱120, and restructuring and other provisions of ₱200. None of
the provisions recognized during the period affected cash.
Requirement: Compute for the cash flow from operating activities using the indirect
method.