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the SCF. 4. Payments for acquisition of a merchandise inventory are reported as investing activities. 5. Statement of Cash Flows explains the observed difference in the cash balance from the beginning to the end of the period. 6. Business activities are classified into operating, investing and funding activities in the SCF. 7. Salary and utility pavments are reported as operating activities

the SCF. 4. Payments for acquisition of a merchandise inventory are reported as investing activities. 5. Statement of Cash Flows explains the observed difference in the cash balance from the beginning to the end of the period. 6. Business activities are classified into operating, investing and funding activities in the SCF. 7. Salary and utility pavments are reported as operating activities

FINANCIAL ACCOUNTING
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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Just answer the true or false 4-10

TRUE OR FALSE: Read each sentence carefully and determine whether the statement is True or False. Write your answers in the space provided before the number. 1. The Statement of Cash Flows shows the amount of cash received and used in the business organized according to operating, investing, and financing activities. 2. Cash payment for bank loan are reported under cash flows from operating activities. 3. If the company has no accounts receivable balance at the beginning and at the end of the year, then net sales reported in the Statement of Comprehensive Income will most likely be equal to the cash received from customers reported in the SCF. 4. Payments for acquisition of a merchandise inventory are reported as investing activities. 5. Statement of Cash Flows explains the observed difference in the cash balance from the beginning to the end of the period. 6. Business activities are classified into operating, investing and funding activities in the SCF. 7. Salary and utility payments are reported as operating activities. 8. Noncash expenses such as depreciation and amortization are deducted from the net income to arrive at the cash flows from operating activities. 9. A negative cash flow from investing activities is bad indicator of the company's ability to generate cash. 10. The bottom line of the Statement of Cash Flow is equivalent to the cash balance presented in the SFP. COMPREHENSIVE PROBLEM Juana's sari-sari store had the following transactions during the year: a. Purchase of goods. Paid cash. 100,000 b. Sale of goods. Received cash. 150,000 c. Paid utilities 30,000 d. Paid rent 10,000 e. Sold equipment for cash 100,000 f. Owner withdraws investment 10,000 1. Compute for the net cash flow generated by/used in operating activities 2. Using the given above, compute for the net cash flow generated by/used in investing activities. Using the given above, compute for the net cash flow generated by/used in financing activities. 3. 4. Using the given above, prepare a Cash Flow Statement using direct method.
Transcribed Image Text:TRUE OR FALSE: Read each sentence carefully and determine whether the statement is True or False. Write your answers in the space provided before the number. 1. The Statement of Cash Flows shows the amount of cash received and used in the business organized according to operating, investing, and financing activities. 2. Cash payment for bank loan are reported under cash flows from operating activities. 3. If the company has no accounts receivable balance at the beginning and at the end of the year, then net sales reported in the Statement of Comprehensive Income will most likely be equal to the cash received from customers reported in the SCF. 4. Payments for acquisition of a merchandise inventory are reported as investing activities. 5. Statement of Cash Flows explains the observed difference in the cash balance from the beginning to the end of the period. 6. Business activities are classified into operating, investing and funding activities in the SCF. 7. Salary and utility payments are reported as operating activities. 8. Noncash expenses such as depreciation and amortization are deducted from the net income to arrive at the cash flows from operating activities. 9. A negative cash flow from investing activities is bad indicator of the company's ability to generate cash. 10. The bottom line of the Statement of Cash Flow is equivalent to the cash balance presented in the SFP. COMPREHENSIVE PROBLEM Juana's sari-sari store had the following transactions during the year: a. Purchase of goods. Paid cash. 100,000 b. Sale of goods. Received cash. 150,000 c. Paid utilities 30,000 d. Paid rent 10,000 e. Sold equipment for cash 100,000 f. Owner withdraws investment 10,000 1. Compute for the net cash flow generated by/used in operating activities 2. Using the given above, compute for the net cash flow generated by/used in investing activities. Using the given above, compute for the net cash flow generated by/used in financing activities. 3. 4. Using the given above, prepare a Cash Flow Statement using direct method.
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