SENIOR HIGH SCHOOL

Fundamentals of
Accountancy, Business
and Management 2
Quarter 3 - Module 4
Statement of Cash Flows
About the Module

This module was designed and written with you in mind. It is here to help you master
about the Statement of Cash Flows (SCF). The scope of this module permits it to be
used in many different learning situations. The language used recognizes the diverse
vocabulary level of students. The lessons are arranged to follow the standard
sequence of the course. But the order in which you read them can be changed to
correspond with the textbook you are now using.

This module is divided into two lessons, namely:

Lesson 1 – Components and Structure of Statement of Cash Flows
Lesson 2 – Preparation of Statement of Cash Flows

After going through this module, you are expected to:

• discuss the components and structures of a Statement of Cash Flows; and
• prepare a Statement of Cash Flows.

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 What I Know (Pretest)

Instruction: Choose the letter of your answer for the following items. Write them on
a separate sheet of paper.

1. Statement 1 – Payment of income taxes decreases cash.

Statement 2 – Payment of income taxes is classified as financing activity in the
Statement of Cash Flows.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

2. Statement 1 – Proceeds from sale of vehicle decreases cash.

Statement 2 – Proceeds from sale of vehicle is classified under operating activity
in the Statement of Cash Flows.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

3. Statement 1 – Payment for salaries of employees decreases cash.

Statement 2 – Transaction in statement 1 is classified as investing activity in the
Statement of Cash Flows.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

4. Statement 1 – Depreciation expense - Furniture & Fixtures involve cash.

Statement 2 – Purchase of equipment on account involves cash.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

5. Statement 1 – Additional investment from owners is classified as investing

activity.
Statement 2 – Payment of interest is classified as operating activity because it
affects profit and loss of the business.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

For items 6 to 10, refer to the statements below:

Analyze the following transactions and tell what major section in the Statement of
Cash Flows does each belong. Choices are as follow:
A. Financing Activity
B. Investing Activity
C. Operating Activity

6. Cash receipts from sale of goods and rendering of services.

7. Cash receipts from royalties, fees, commissions and other revenues.
8. Cash payment to suppliers of goods and services.

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9. Cash payment to acquire intangible asset.
10. Cash proceeds from bank loans.

For items 11 to 15, refer to the problem below:

Below are the cash transactions of Alcoy Company for the month of October 2020:

Cash payments to suppliers of goods and services 35,000

Cash receipts from rendering of services 60,000
Payment to owners 15,000
Proceeds from bank loans 35,000
Proceeds from cash investment of owners 125,000
Payment for acquisition of equipment 110,000
Cash beginning, December 1, 2019 1,010,000

11. How much is the net cash flows from operating activities?
A. ₱ 25,000 C. ₱ 60,000
B. ₱ 35,000 D. ₱ 95,000

12. How much is the net cash flows from investing activities?
A. (₱ 110,000) C. ₱ 75,000
B. (₱ 25,000) D. ₱ 135,000

13. How much is the net cash flows from financing activities?
A. ₱ 60,000 C. ₱ 135,000
B. ₱ 110,000 D. ₱ 145,000

14. How much is the net increase in cash for the 3 activities?
A. ₱ 60,000 C. ₱ 75,000
B. ₱ 65,000 D. ₱ 160,000

15. How much is the cash balance as of December 31, 2019?

A. ₱ 1,060,000 C. ₱ 1,100,000
B. ₱ 1,070,000 D. ₱ 1,160,000

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 Lesson Components and Structure of
s
1 Statement of Cash Flows

What I Need to Know

At the end of this lesson, you are expected to:
o discuss the components and structures of a Statement of Cash Flows.

What’s In

In the previous module, you learned about the

preparation of the Statement of Changes in Equity.
The presentation of the Statement of Changes in
Equity varies according to the form of the business
organization.

To help you recall on this specific financial

Clipart 1: https://tinyurl.com/yyxj9rrl statement, let us do the following activity:

Activity 1.1: Statement of Changes in Equity

Instruction: Enumerate the steps in preparing the Statement of Changes in
Equity for a Single Proprietorship.

1._________________________ 4._________________________
2._________________________ 5._________________________
3._________________________

What’s New

Statement of Cash Flows generally presents the sources

and utilization of an organization’s cash and cash
equivalents. Although the Statement of Cash Flows is
historical in nature, the information contained in such
statement is useful in predicting future cash inflows and
outflows of the organization (Beticon, 2016).
Clipart 2: https://tinyurl.com/y3g2ol33

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This financial statement will aid the organization in their financing decisions. For
example, businesses confronted with forecasted cash shortages may opt to borrow
from the bank or let owners infuse additional capital (Beticon, 2016).

According to Ong (2017), the components of the Statement of Cash Flows are
classified according to activities. These are the following:

Operating Investing Financing

Activities Activities Activities

What Is It

The tabular presentation below would give us an idea on what are the three sections
or activities in the Statement of Cash Flows and how does one differ from the other
activities.

Operating Investing Financing

Activities Activities Activities

These are the baseline These are generally a result These usually arise from
cash activities of the from the acquisition and changes in non-current
business related to its disposal of non-current liabilities and owner’s
normal operating cycle. assets. equity of the business.

Furthermore, such
activities are related to
the primary revenue-
producing activity of the
business.

Examples: Examples: Examples:

1)Cash receipts from the 1)Cash receipts from sale 1)Cash investments from
sale of goods and of property, plant and owners (+)
rendering of services (+) equipment (+) 2)Cash proceeds from
2)Cash receipts from 2)Cash receipts from sale bank loans (+)
royalties, fees, of intangible assets (+) 3)Cash distribution to
commissions and other 3)Cash receipts from sale owners (-)
revenues (+) of long-term assets (+) 4)Repayment of bank
3)Interest received (+) 4)Cash payments in loans (-)
4)Dividend received (+) acquiring property, plant
5)Cash payments to and equipment (-)
suppliers of goods and 5)Cash payments to
services (-) acquire intangible assets (-
)

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 6)Cash payments to
employees (-)
7)Cash payments for
taxes (-)
8)Interest paid (-)
+ sign above indicates addition to cash balance, while
– sign indicates deduction from cash balance
In Summary:
Operating Activities refers Investing Activities refers Financing Activities refers
to Profit or Loss accounts to Non-Current Asset to Equity and Non-Current
accounts Liability accounts
When using the direct method, focus on the Cash account.
(Cited from Beticon, 2016)

What’s More

NOW IT’S YOUR TURN!

Activity 1.2: Let Us Identify

Instruction: Identify the effect of the following transactions to the Statement of Cash
Flows (SCF) following the three major activities presented above. Write INC if it
increases the SCF, write DEC if it decreases the SCF and NE if it has no effect in
the SCF.

1. Proceeds from bank loans.

2. Depreciation expense – Furnitures & Fixtures
3. Three months of rent are paid in advance.
4. Rendered services to Customer A on account.
5. Payment of interest to Bank A.
6. Purchase of equipment on account.
7. Payment of accounts payable.
8. Additional investment of owner in the form of equipment.
9. Cash withdrawal made by owner.
10. Additional cash investment of owner.

Activity 1.3: Fill It In!

Instruction: Write the word that best completes each blank spaces below.

This lesson talks about #1 . There are three activities that compose the
Statement of Cash Flows namely: #2 , #3 and #4 . #5 activities
are the baseline cash activities of the business related to its normal operating cycle.
One of the examples of operating activities is #6 . #7 is an example of
an investing activity, while #8 is an example of a financing activity.

In summary, a transaction can be classified as operating if #9 . On the other

hand, it is to be classified as investing if #10 .

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 What I Need to Remember

• Statement of Cash Flows has three different activities namely: operating,

investing and financing.
• Operating activities are related to the normal operating cycle of the business.
• Investing activities generally result from acquisition and disposal of non-
current assets.
• Financing activities arise from changes in non-current liabilities and owner’s
equity.

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 Lesson Preparation of Statement of Cash
2 Flows

What I Need to Know

At the end of this lesson, you are expected to:

o differentiate the two methods in presenting the Statement of Cash Flows; and
o prepare the Statement of Cash Flows.

What’s In

In lesson 1, you have learned about the various

transactions that are classified under the three major
sections of the Statement of Cash Flows, namely:
Operating Activities,
Financing Activities and
Investing Activities.

To refresh your learnings on this topic, let us do the

activity below.
Clipart 1: https://tinyurl.com/yyxj9rrl

Activity 2.1: Major Sections in the Statement of Cash Flows

Instruction: Give at least 5 transactions of each of the major sections in the
Statement of Cash Flows. Use a separate sheet of paper for your answers.

Operating Activities: Investing Activities: Financing Activities:

1._________________ 1._________________ 1.________________
2._________________ 2._________________ 2._________________
3._________________ 3._________________ 3._________________
4._________________ 4._________________ 4._________________
5._________________ 5._________________ 5._________________

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 What’s New

According to Beticon (2016), there are two methods in presenting the Statement of
Cash Flows. These are:

Direct Indirect
Method Method

What is It

For the purpose of discussion, we will use the following information:

X LAW OFFICE
ADJUSTED TRIAL BALANCE
For the Period Ended December 31, 2020
Debit Credit
101 Cash 686,900
102 Accounts Receivable 76,500
103 Office Supplies 3,500
104 Prepaid Rent 111,500
105 Office Equipment 5,100
Accumulated Depreciation-
106
Office Equipment 2,500
201 Accounts Payable 26,500
202 Notes Payable - Bank 101,500
203 Unearned Revenues 36,500
204 Interest Payable 2,000
301 Mr. X - Capital 600,000
302 Mr. X - Drawings 50,000
401 Professional Fees 249,000
402 Salaries Expense 16,500
403 Rent Expense 11,500
404 Utilities Expense 9,500
405 Representation Expense 26,500
406 Office Supplies Expense 4,500
407 Depreciation Expense 2,500
408 Interest Expense 2,000
409 Permit and Licenses Expense 11,500
Total 1,018,000 1,018,000

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Steps in preparing the Statement of Cash Flows:

1) Write the heading.

X LAW OFFICE
Statement of Cash Flows
For the Period Ended December 31, 2019

2) Analyze the cash transactions. Once again, this financial statement focuses on
the cash account, if the method used is the direct method.

Below is the Cash T-Account of X Law Office:

Cash - 101
Debit Credit
Dec. 1 600,000 Dec. 1 11,600
Dec. 2 100,000 Dec. 2 120,000
Dec. 8 37,500 Dec. 3 5,000
Dec. 17 135,000 Dec. 10 36,000
Dec. 22 35,000 Dec. 15 25,000
907,500 Dec. 28 23,000
686,900 220,600

Based on the description of cash transactions, they are analyzed in the table below:

DEBITS

Date Amount Nature Classification Reason Notation

Cash investment
Dec. 1 600,000 Financing Affects equity A
from owner
Proceeds from Affects non-
Dec. 2 100,000 Financing B
bank loan current liability
Collection from
Dec. 8 37,500 Operating Affects net income C
Customer A
Collection from
Dec. 17 135,000 Operating Affects net income D
Customer B
Collection from
Dec. 22 35,000 Operating Affects net income E
Customer C
907,500

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 CREDITS

Date Amount Nature Classification Reason Notation

Payment of business Affects net
Dec. 1 11,600 Operating F
permit income
Payment of annual Affects net
Dec. 2 120,000 Operating G
rent income
Purchase of office Affects net
Dec. 3 5,000 Operating H
supplies income
Purchase of office Affects non-
Dec. 10 36,000 Investing I
equipment current assets
Cash withdrawal of
Dec. 15 25,000 Financing Affects equity J
owner
Payment of Affects net
Dec. 28 23,000 Operating K
employees' salary income
220,600

3) Prepare the Operating Activities Section.

Based on the analysis shown above, we can already determine that items C, D, E, F,
G, H and K are under operating activities. All cash receipts from customers are
grouped accordingly (C, D and E). Consequently, all cash payments to suppliers are
also grouped (F, G, H and K).

Below is the completed operating activities section of X Law Office:

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from rendering of service 207,500 (C + D + E)
Cash payments from operating activities -159,600 (F + G + H + K)
Net cash flow from operating activities 47,900

4) Prepare the Investing Activities Section.

Based on the analysis, it was determined that item I is the only investing activity.
This pertains to the purchase of equipment. Below is the completed investing activity
section of X Law Office:

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of office equipment 36,000 (I)
Net cash flow from investing activities - 36,000

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5) Prepare the Financing Activities Section.

Based on the analysis above, it was determined that items A, B, and J are financing
activities. These pertain to the owner’s investment, bank loan proceeds and owner
withdrawal, respectively. Below is the completed financing activities section of X Law
Office:

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from cash investment of owners 600,000 (A)
Proceeds from bank loans 100,000 (B)
Cash withdrawal of owner -25,000 (J)
Net cash flow from financing activities 675,000

6) Determine the Ending Cash Balance.

After determining the net effects of the operating, investing and financing activities,
they are now aggregated. Below is the line item for the total effect of cash
transactions for the year:

The beginning balance of cash is added to the item above (net increase in cash) to
arrive at the ending balance. Since this is the first year of operations for X Law Office,
there is no beginning balance for the cash account, as shown below:

NET INCREASE IN CASH 586,900

CASH AT THE BEGINNING OF THE PERIOD -
CASH AT THE END OF THE PERIOD 586,900

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Below is the completed Statement of Cash Flows for X Law Office:

X LAW OFFICE
STATEMENT OF CASH FLOWS
For the Period Ended December 31, 2019

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from rendering of service 207,500
Cash payments from operating activities - 159,600
Net Cash Flow from Operating Activities 47,900

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of office equipment - 36,000
Net Cash Flow from Investing Activities - 36,000

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from cash investment of owner 600,000
Proceeds from bank loans 100,000
Cash withdrawal of owner - 25,000
Net Cash Flow from Operating Activities 675,000

NET INCREASE IN CASH 686,900

NET INCREASE IN CASH 686,900

CASH AT THE BEGINNING OF THE PERIOD -
CASH AT THE END OF THE PERIOD 686,900

Note that the line item “cash at the end of the period” should be the same with the
cash presented in the Statement of Financial Position (Beticon, 2016). Just
remember that the Statement of Cash Flows focuses on all “cash” transactions, if we
are using the direct method.

Indirect Method of Presenting the Statement of Cash Flows

The indirect method presents the operating activities starting with the pre-tax
income. It then reconciles the pre-tax income for non-cash income and expenses.
After which, the movements in current assets and liabilities are adjusted to the
resulting figure (Beticon, 2016).

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Shown below is the proforma Statement of Cash Flows presented using the indirect
method:

X COMPANY
STATEMENT OF CASH FLOWS
For the Period Ended December 31, xxx

CASH FLOW FROM OPERATING ACTIVITIES

Income before income tax xxx
Adjustments for:
Depreciation xxx
Amortization xxx
Operating income before working capital changes xxx
Increase in accounts receivable (xxx)
Decrease in inventories xxx
Increase in accounts payable xxx
Decrease in notes payable (xxx)
Net Cash Flow from Operating Activities xxx

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (xxx)
Net Cash Flow from Investing Activities (xxx)

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from cash investment of owner xxx
Proceeds from bank loans xxx
Cash withdrawal of owner (xxx)
Net Cash Flow from Operating Activities xxx

NET INCREASE IN CASH xxx

NET INCREASE IN CASH xxx

CASH AT THE BEGINNING OF THE PERIOD xxx
CASH AT THE END OF THE PERIOD xxx

What’s More

NOW IT’S YOUR TURN!

Activity 2.2 Name the Activity and Its Effect

Instruction: In column 2 labeled as “Activity”, identify the classification of the
following transactions. Write OA (if Operating Activity), IA (if Investing Activity), or
FA (if Financing Activity).

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In column 3 labeled as “Effect to Statement of Cash Flows”, identify the effect of these
accounts to the Statement of Cash Flows. Write INC (if it increases the cash balance)
or DEC (if it decreases the cash balance).

Effect to
Statement of
Transactions Activity Cash Flows
1)Receipt of cash for services rendered
2)Payment of Income Tax
3)Payment of salaries to employees
4)Payment of long-term debt
5)Payment of interest to Bank A
6)Cash received from Customer A as full payment of
receivable
7)Payment of accounts payable
8)Proceeds from sale of vehicles
9)Cash withdrawal made by owner
10)Purchase of equipment

Activity 2.3 Let’s Solve!

Instruction: Prepare the Statement of Cash Flows using the direct method. Follow
the complete format.

Below are the cash transactions of X Services for the month of December 2019:

Cash payment to suppliers of goods and services 22,500

Cash receipts from rendering of services 35,000
Payment to owners 12,500
Proceeds from bank loans 22,500
Proceeds from cash investment of owners 67,750
Payment for income taxes 16,000
Payment for interest 16,250
Payment for acquisition of equipment 40,000
Cash at the beginning of the year 327,500

What I Need to Remember

• The transactions are to be identified and classified as to the following activities:

operating, investing and financing.
• Transactions indicating cash receipts are to be added to the cash balance,
while transactions indicating cash payments are to be deducted from the cash
balance.
• Determine the net effects of all transactions under the three activities.
• The beginning balance of cash is added to the increase in cash of the three
activities to arrive at the ending balance.

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 What I Can Do

Activity 2.4 Being the Accountant

Instruction: Go over the foregoing scenario. Do what is asked for.

Let us assume that you are the accountant of X Law Office. The Statement of Cash
Flows you prepared for the period ended December 31, 2019 has an ending cash
balance of P588,500, as being shown above.

Between January 8 to 12, 2020, you together with the other managers and
supervisors of the business are having your annual conference for strategic planning
and target setting for the entire year of 2020.

On the first day of the conference, the entire team identified that the company will
need a cash ending balance as of June 30, 2020 amounting to One Million Pesos,
which is exactly 69.92% higher than the cash balance ending December 31, 2019.

As the company’s accountant, you are to come up with strategies on how to reach
your projected cash ending balance as of June 30, 2020 in the amount of One Million
Pesos. Name at least three strategies that can possibly increase cash. You can go
for strategies that would target either operating activities, investing activities,
financing activities or the combination of 2 or 3 of these activities. Bear in mind that
you have less than six months to work on achieving your objective. Therefore, your
strategies should be realistic and shall observe SMART (Specific, Measurable,
Achievable, Realistic and Time-bound).

RUBRIC:

Needs
Unsatisfactory Improvement Satisfactory Outstanding
0 pts 5 pts 15 pts 25 pts
Content & - Content is - Content is not - Content is - Content is
Development incomplete. comprehensive accurate and comprehensive,
- Major points and/or persuasive. accurate and
are not clear. persuasive. - Major points persuasive.
- Specific - Major points are stated. - Major points
examples are are addressed, - Responses are are stated
not used. but not well adequate and clearly and are
supported. addresses the well-supported.
- Responses are topic. - Responses are
inadequate or - Content is excellent,
do not address clear. timely and
the topic. - Specific addresses the
- Specific examples are topic.
examples do used. - Content is
not support the clear.
topic. - Specific
examples are
used.

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 Organization - Organization - Structure of - Structure is - Structure of
& Structure and structure the paper is not mostly clear the paper is
detract from easy to follow. and easy to clear and easy
the message. - Transitions follow. to follow.
- Writing is need - Transitions are - Transitions are
disjointed and improvement. present. logical and
lacks transition - Conclusion is - Conclusion is maintain the
of thoughts. missing, or if logical. flow of thought
provided, does throughout the
not flow from paper.
the body of the - Conclusion is
paper. logical and
flows from the
body of the
paper.
Grammar, - Paper contains - Paper contains - Rules of - Rules of
Punctuation numerous few grammar, grammar,
& Spelling grammatical, grammatical, usage, and usage, and
punctuation, punctuation punctuation punctuation
and spelling and spelling are followed are followed;
errors. errors. with minor spelling is
errors. correct.
Spelling is
correct.

(Adapted from RCampus entitled Short Essay Questions Rubric, 2020)

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 Assessment (Posttest)

Instruction: Choose the letter of your answer for the following items. Write your
answers on a separate sheet of paper.

1. Statement 1 – Payment of interests has no effect in cash.

Statement 2 – Payment of interest is classified as financing activity in the
Statement of Cash Flows.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

2. Statement 1 – Payment to employees has no effect in cash.

Statement 2 – Payment to employees is classified under operating activity
in the Statement of Cash Flows because it affects non-current
assets.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

3. Statement 1 – Cash purchase of patents affects operating activity.

Statement 2 – Proceeds from long-term debt is under investing activity in
Statement of Cash Flows.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

4. Statement 1 – Depreciation expenses sometimes involve cash.

Statement 2 – Operating activity includes transactions that affect non-current
assets.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

5. Statement 1 – Financing activity includes transactions that affect non-current

liabilities.
Statement 2 – Therefore, obligations that mature beyond one year is classified
under financing activity.
A. Both statements are false. C. Only statement 1 is false.
B. Both statements are true. D. Only statement 1 is true.

For items 6 to 10, refer to the problem below

Below are the cash transactions of XYZ Trading for the month of December 2019:

Cash payments to suppliers of goods and services 80,000

Cash receipts from rendering of services 140,000
Payment to owners 24,000
Proceeds from bank loans 80,000
Proceeds from cash investment of owners 332,000

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 Payment for income taxes 43,600
Payment for interest 45,000
Proceeds for dividends of investment 52,000
Payment for acquisition of patents 346,000
Proceeds from sale of equipment 52,000
Payments of bank loans 24,000
Payment for acquisition of equipment 290,000
Cash beginning, December 1, 2019 2,810,000

6. How much is the net cash flows from operating activities?

A. (₱ 28,000) C. ₱ 67,000
B. ₱ 23,400 D. ₱ 112,000

7. How much is the net cash flows from investing activities?

A. (₱ 688,000) C. (₱ 294,000)
B. (₱ 584,000) D. (₱ 238,000)

8. How much is the net cash flows from financing activities?

A. ₱ 284,000 C. ₱ 388,000
B. ₱ 364,000 D. ₱ 412,000

9. How much is the net increase(decrease) in cash for the 3 activities?

A. (₱ 300,600) C. (₱ 196,600)
B. (₱ 276,600) D. (₱ 148,600)

10. How much is the cash balance as of December 31, 2019?

A. ₱ 2,509,400 C. ₱ 2,613,400
B. ₱ 2,533,400 D. ₱ 2,661,400

For items 11 to 15, refer to the problem below:

Below are the cash transactions of XYZ Trading for the month of December 2019:

Cash payments to suppliers of goods and services 6,250

Cash receipts from rendering of services 12,500
Payment to owners 1,250
Proceeds from bank loans 6,250
Proceeds from cash investment of owners 28,750
Payment for income taxes 3,000
Payment for interest 3,125
Proceeds for dividends of investment 3,750
Payment for acquisition of equipment 250,000

11. How much is the net increase(decrease) in cash for the 3 activities?
A. (₱ 212,375) C. (₱ 209,250)
B. (₱ 211,125) D. (₱ 207,625)

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12. How much is the total cash payments from operating activities?
A. (₱ 12,375) C. ₱ 12,250
B. (₱ 9,250) D. ₱ 12,500

13. How much is the net cash flows from financing activities?
A. ₱ 31,250 C. ₱ 37,500
B. ₱ 33,750 D. ₱ 38,750

14. From the given data in the table above, how much is the cash balance as of
December 31, 2019?
A. (₱ 224,875) C. (₱ 211,125)
B. (₱ 212,375) D. ₱ 37,625

15. How much should be the cash on December 1, 2019, so the cash balance as of
December 31, 2019 will be ₱ 1,500,000?
A. ₱ 1,612,375 C. ₱ 1,712,375
B. ₱ 1,711,125 D. ₱ 1,718,625

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 20
Activity 2.3
Activity 2.2
1. OA INC
2. OA DEC
3. OA DEC
4. FA DEC
5. OA DEC
6. OA INC
7. OA DEC
8. IA INC
9. FA DEC
10. IA DEC
Activity 2.1 Activity 1.3
Student’s answers may vary. Student’s answers may vary.
Activity 1.2 Activity 1.1
1. INC 6. NE 1. Determine the equity at the beginning of
2. NE 7. DEC the period
3. DEC 8. NE 2. Add additional investments
4. NE 9. DEC 3. Add net income for the year/period
5. DEC 10. INC 4. Deduct owner’s withdrawal
5. Compute for the ending equity
required.
Remember: This portion of the module contains all the answers. Your HONESTY is
Answer Key
References

Textbook
Beticon, J., et al. Accountancy, Business and Management 2. Vibal
Inc. 2016. pp. 91-103.
Ong, F., et al. Accountancy, Business and Management 2. C & E
Publishing, Inc. 2017. pp. 50-54.

Websites
RCampus. Short Essay Questions Rubric. Retrieved on September 16, 2020
from https://tinyurl.com/y6lbs8hd.

Cliparts
Clipart 1: retrieved from https://tinyurl.com/yyxj9rrl on August 8, 2020.
Clipart 2: retrieved from https://tinyurl.com/y3g2ol33 on August 30, 2020.

Congratulations!
You are now ready for the next module. Always remember the following:

1. Make sure every answer sheet has your

▪ Name
▪ Grade and Section
▪ Title of the Activity or Activity No.
2. Follow the date of submission of answer sheets as agreed with your
teacher.
3. Keep the modules with you AND return them at the end of the school
year or whenever face-to-face interaction is permitted.

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