Immaculate Conception - I College of Arts and Technology

Conceptual Framework and Accounting Standards

JULIE ANN V. CUENCO April 10, 2021

BSA 1-1

PROBLEM ON PAS # 7

Milk company provided the following information during the current year:

Dividend received 500,000

Dividend paid 1,000,000
Cash received from customers 9,000,000
Proceeds from issuing shares of stocks 1,500,000
Interest received 200,000
Proceeds from the sale of long term investment 2,000,000
Cash paid to suppliers and employees 6,000,000
Interest paid on long term debt 400,000
Income taxes paid 300,000
Cash balance, Jan. 1 1,800,000

Prepare the cash flow statements, classifying them into operating, investing and financing.

ANSWER:

Milk Company
Statement of Cash Flow
For Year Ended December 31

Cash flows from Operating Activities

Cash Receipts:
Cash received from customer 9,000,000
Dividend received 500,000
Interest received 200,000 9,700,000
Cash Payments:
Cash paid for suppliers/ employees 6,000,000
Interest paid 400,000
Income taxes paid 300,000 (6,700,000)
Net Cash from Operating Activities 3,000,000

Cash flows from Investing Activities

Proceeds from sale of Long term investment 2,000,000

Net Cash from Investing Activities 2,000,000

Cash flow from Financing Activities

Dividend paid (1,000,000)
Proceeds from using Share capital 1,500,000
Net Cash From Financing Activities 500,000

Add: Cash Balance Jan 1 1,800,000

Cash Balance Ending 7,300,000
 Immaculate Conception - I College of Arts and Technology
Conceptual Framework and Accounting Standards

Operating Activities

Cash flows from Operating Activities

Cash Receipts:
Cash received from customer 9,000,000
Dividend received 500,000
Interest received 200,000 9,700,000
Cash Payments:
Cash paid for suppliers/ employees 6,000,000
Interest paid 400,000
Income taxes paid 300,000 (6,700,000)
Net Cash from Operating Activities 3,000,000

Investing Activities

Cash flows from Investing Activities

Proceeds from sale of Long term investment 2,000,000
Net Cash from Investing Activities 2,000,000

Financing Activities

Cash flow from Financing Activities

Dividend paid (1,000,000)
Proceeds from using Share capital 1,500,000
Net Cash From Financing Activities 500,000