FINANCIAL ACCOUNTING AND

REPORTING

2020-2021
 COLLEGE OF BUSINESS AND MANAGEMENT
MODULE 15 – Statement of Cash Flows

Name Of Student: Week Number:

Course Code:AEC2 Name of Faculty: Judith P. Piamonte
Course Title:Financial Accounting and Reporting

I. OBJECTIVES:

At the end of this lesson, the students should be able to:

1) Discuss the contents of Statement of Cash Flows

2) Define the elements in the Statement of Cash Flows
3) Familiarize on the information required to be presented on the face of the Statement
of Cash Flows.
4) Solve problems related to the financial statement.

II. LESSON:

A Statement of Cash Flow is a financial statement that shows the cash receipts and
cash disbursements of an entity as a result of its operating, investing, and financing activities.

This statement is essential to a business entity because this will give the user the
following valuable information:

1) Whether or not the business enterprise can settle its monetary obligation when they
mature.
2) How the business utilized its cash;
3) Where the profit of the business go;
4) The source of money of the business which was used in financing its big project;
5) How they spent the proceeds of loan taken from a financing institution; and
6) The major sources and uses of cash during the accounting period.

The Statement of Cash Flows summarizes the receipts and disbursement of cash as a
result of:

1) Operating activities
2) Investing activities; and
3) Financing activities

 Operating activities pertain to transactions that are directly related to the company's main
course of business.
 Investing activities refer to "where the company puts its money". These activities include
long-term investments, acquisition of property, plant and equipment; and other transactions
related to non-current assets.
 Financing activities include transactions in which a company acquires its funds. These
include loans from banks (long-term liabilities) and contributions from owners.

Illustration 13c-1

A summary of cash flows for Badaf Beauty Salon for the fiscal year ended June 30, 2020, is
shown below:

Cash receipts:
Received from customers P420,000
Received from the proprietor as additional investment 30,000
Cash Payments:
Paid for operating expenses 235,000
Paid for acquisition of land 90,000
Paid to owner for personal use 105,000

The cash balance as of July 1, 2020 was P50,000

REQUIRED: Prepare a statement of cash flows for Badaf Beauty Salon for the year ended June
30, 2020.

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 .

III. ACTIVITIES:

Using any reliable reference materials that you have, practice solving problems related to Non-
profit Organization

Practice by answering the following problems. You may use MS Word, MS Excel, or a clean
sheet of paper for your answers.

Activity 1:

IV. ASSESSMENT:

If you have your laptop/computer, you may use MS Excel for this part. If you cannot do it in
MS Excel, put your answers on clean sheets of paper, take photos of them, and submit your
output via Google Classroom.

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V. REFERENCES:

Ampongan, O. E., Fundamentals of accounting, part 1

Valix, C.T., Peralta,J.F., Valix, C.A.M.(2015). Financial accounting volume 1 & 2.GIC Enterprises &
Co., Inc.
Ballda, W., & Ballada, S. (2020). Accounting fundamentals (6th ed.).
Ballada, W., &Ballada, S. (2016). Basic accounting made easy.
Onsay, Emmanuel A., Chavez, Rosalie V., (2019)Fundamentals of Accounting for Non-Accountancy
Students Instructional Material ParSU
Abner, Rina A., (2020)Financial Accounting and Reporting Students Instructional Material ParSU

Prepared by: Reviewed by: Approved:

JUDITH P. PIAMONTE ROLAN JON GO BULAO, MA RINA A. ABNER, CPA, MBA, MSA
Faculty Program Director Dean

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