Beruflich Dokumente
Kultur Dokumente
2 AY 2016-2017
Cash Flow Exercises
Problem 1
The statement of cash flows for Riker Company (prepared using the indirect method) follows. Consider
the following. Consider the following additional information:
a) Sales for the year totaled $812,350. Cost of goods sold was $500,000. Operating expenses were
$100,000. Interest expense was $23,000. Income tax expense was $40,430
b) Of the decrease in accounts payable, 80% is related to inventory purchases; the remaining 20%
related to operating expenses
c) Depreciation and amortization are period costs; they do not enter into the computation of cost of
goods sold.
Prepare the Operating Activities section of the statement of cash flows for Riker Company using the direct
method.
Problem 2
The following shows the comparative balance sheet and current year income statement for Ganda Ko Ay,
Ltd.
Additional information:
1. Equipment with a net book value of P7,500 and original cost of P10,500 was sold for P7,500
2. All sales are made on credit
3. The company received cash dividends from FVTPL investments amounting to P2,000, recorded as
investment income
4. The Company paid and declared dividends during the year.
5. Interest expense for the year 2017 was P2,000, which was fully paid during the year.
7. Composition of Gain from MTM Valuation are as follows:
Investments at Fair Value through Profit or Loss 300.00
Investment Properties 700.00
Prepare a statement of cash flows for the year ended October 31, 2011 using the indirect method of
reporting cash flows from operations.