The net cash flow from operating activities amounted to PBlank 1. PROBLEM FBohol Company provided the following for the current year:Cash balance, January 1P6,000,000Decrease in long-term debtGain on sale of equipmentDepreciation5,000,000300,0001,100,000Proceeds from investment of owners4,000,000Purchase of equipment for cash5,000,000Cash withdrawal from owner2,500,000Net income7,600,000Proceeds from sale of equipment2,000,000Increase (decrease) in working capital accounts:Accounts ReceivableInventoryTrade accounts and notes payableIncome tax payable(2,000,000)2,500,0003,800,000(1,500,000)

Solution Concept Cash flow from operating activities includes cash the is generated from the general…

Answered: Cash balance, January 1 Decrease in…

Cash balance, January 1 Decrease in long-term debt Gain on sale of equipment Depreciation Proceeds from investment of owners Purchase of equipment for cash Cash withdrawal from owner Net income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The net cash flow from operating activities amounted to PBlank 1.

PROBLEM F
Bohol Company provided the following for the current year:
Cash balance, January 1
P6,000,000
Decrease in long-term debt
Gain on sale of equipment
Depreciation
5,000,000
300,000
1,100,000
Proceeds from investment of owners
4,000,000
Purchase of equipment for cash
5,000,000
Cash withdrawal from owner
2,500,000
Net income
7,600,000
Proceeds from sale of equipment
2,000,000
Increase (decrease) in working capital accounts:
Accounts Receivable
Inventory
Trade accounts and notes payable
Income tax payable
(2,000,000)
2,500,000
3,800,000
(1,500,000)

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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