FAR 6938
Operating, Investisng and Financing Activities
1. An entity provided the following information for the current year.
Sales revenue
Cost of goods sold and operating expenses except noncash expenses
Depreciation and amortization
Gain on sale of equipment
Unrealized loss on equity investment held for trading
Interest expense on short-term debt
January 1
December 31
Accounts receivable, net of allowance
220,000
150,000
Inventory
350,000
400,000
Accounts payable
475,000
520,000
Interest payable
100,000
85,000
Equity investment held for trading
600,000
500,000
What amount should be reported as net cash provided by operating activities?
a. 1,700,000
b. 1,950,000
c. 2,200,000
d. 2,000,000
5,000,000
2,750,000
500,000
200,000
100,000
300,000
Increase
(Decrease)
( 70,000)
50,000
45,000
( 15,000)
( 100,000)
FAR 6938
Operating, Investisng and Financing Activities
2. An entity reported net income of P7,000,000 for the current year.
January 1
Accounts receivable
1,200,000
Allowance for doubtful accounts
100,000
Prepaid rent expense
600,000
Accounts payable
900,000
Accrued expenses
800,000
Equity investment of FVOCI
1,000,000
What is the net cash provided by operating activities?
a. 7,750,000
b. 7,650,000
c. 6,650,000
d. 7,150,000
December 31
Increase
(Decrease)
1,600,000
200,000
400,000
1,400,000
550,000
1,500,000
400,000
100,000
( 200,000)
500,000
( 250,000)
500,000
FAR 6938
Operating, Investisng and Financing Activities
3. An entity had the following account balances for the current year:
Accounts payable
Inventory
Accounts receivable
Prepaid expenses
January 1
December 31
Increase
(Decrease)
650,000
250,000
900,000
600,000
500,000
300,000
800,000
400,000
( 150,000)
50,000
( 100,000)
( 200,000)
• All purchases of inventory were on account.
• Depreciation during the year was P900,000.
• Equipment was sold during the year at a loss of P300,000.
The entity provided the following cash flows for the current year:
Cash collected from customers
Cash paid for inventory
Cash paid for other expenses
Net cash provided by operating activities
What is the net income for the current year?
a. 3,300,000
b. 2,700,000
c. 3,000,000
d. 3,900,000
9,500,000
(4,100,000)
(1,400,000)
4,000,000
FAR 6938
Operating, Investisng and Financing Activities
4. An entity reported net income of P7,500,000 for the current year. Changes in certain accounts during
the year are:
Investment in shares carried at equity
550,000 Increase
Accumulated depreciation, caused by major repair
210,000 Decrease
Unearned interest income
50,000 Decrease
Premium on bonds payable
140,000 Decrease
Deferred tax liability
180,000 Increase
What is the net cash provided by operating activities?
a. 7,490,000
b. 7,220,000
c. 6,940,000
d. 7,040,000
\
FAR 6938
Operating, Investisng and Financing Activities
5. During the current year, an entity had the following activities:
Payment for bonds payable with carrying amount of P5,000,000
Payment of cash dividend declared in prior year
Preference shares converted into ordinary shares
Proceeds from sale of treasury shares costing P1,000,000
What amount should be reported as net cash used in financing activities?
a. 4,500,000
b. 3,500,000
c. 2,500,000
d. 5,500,000
4,000,000
2,000,000
1,000,000
1,500,000
FAR 6938
Operating, Investisng and Financing Activities
6. An entity had the following activities during the current year:
• Acquired equity investment for cash
• Sold an investment with carrying amount of P2,000,000 for cash
• Acquired a one-year certificate of deposit from a bank
• Interest on the certificate of deposit received from the bank
• Collected dividends on equity investment
What amount should be reported as net cash used in investing activities?
a. 7,000,000
b. 5,000,000
c. 4,700,000
d. 6,300,000
2,000,000
1,500,000
5,000,000
500,000
300,000
FAR 6938
Operating, Investisng and Financing Activities
7. An entity provided the following data for the current year:
Purchase of real estate for cash
Cash borrowed from bank to purchase the real estate
Sale of investment securities for cash
Purchase of patent for cash
Dividend declared
Retirement of preference shares for cash
Payment of bank loan
Issuance of bonds payable for cash
Increase in customers’ deposit
1. What is the net cash used in investing activities?
a. 6,750,000
b. 3,750,000
c. 1,750,000
d. 2,250,000
2. What is the net cash provided by financing activities?
a. 6,000,000
b. 4,000,000
c. 5,000,000
d. 4,500,000
5,500,000
5,500,000
5,000,000
1,250,000
1,000,000
2,000,000
1,500,000
3,000,000
500,000