Pamantasan ng Lungsod ng Valenzuela
College of Accountancy and Business Administration
Accountancy Department
1st Semester A.Y. 2025 – 2026
Statement of Cash Flows
Problem 5:
Nevermore Corporation provides the following information for the year ended December
31, 2025:
Net income P1,882,000
Increase in current assets other than cash 275,000
Increase in current liabilities 122,000
Dividends declared and paid 375,000
Depreciation 256,000
Treasury stock acquired for cash 100,000
Long term debt retired 591,000
Equipment acquired for cash 200,000
The net cash increase for the year ended December 31, 2025 is:
a. P1,985,000
b. P1,025,000
c. P719,000
d. P872,000
Problem 6:
An entity presented the following comparative financial information:
2025 2024
Property, plant and equipment 2,190,000 1,440,000
Accumulated depreciation 450,000 270,000
Long-term investments 225,000 –
Prepaid expenses 351,000 315,000
Merchandise inventory 1,950,000 1,260,000
Accounts receivable, net of allowance 1,560,000 1,080,000
Cash 690,000 640,000
Share capital-ordinary 3,000,000 2,400,000
Retained earnings 906,000 688,000
Long-term note payable 1,275,000 1,095,000
Accounts payable 309,000 282,000
Dividend payable 201,000 –
Accrued expenses 825,000 –
2025 2024
Net credit sales 7,020,000 3,753,000
Cost of goods sold (3,915,000) (1,881,000)
Gross profit 3,105,000 1,872,000
Expenses, including income tax (2,586,000) (1,374,000)
Net income 519,000 498,000
Accounts receivable and accounts payable relate to merchandise for sale in the normal
course of business. The allowance for bad debts was the same at the end of 2025 and 2024
and no receivables were charged against the allowance.
Accounts payable are recorded net of any discount and are always paid within the
discount period.
The proceeds from the note payable were used to finance the acquisition of property, plant
and equipment. Ordinary shares were sold to provide additional working capital.
Question 1: What amount should be reported as net cash provided by operating activities
in 2025?
a. P345,000 c. P546,000
b. P165,000 d. P510,000
Question 2: What amount should be reported as net cash used in investing activities in
2025?
a. P750,000 c. P975,000
b. P225,000 d. P750,000
Question 3: What amount should be reported as net cash provided by financing activities
in 2025?
a. P600,000 c. P750,000
b. P780,000 d. P680,000
Problem 7:
An entity provided the following data:
December 31, 2024 December 31, 2025
Trade accounts receivable, net of allowance 840,000 780,000
Inventory 1,500,000 1,400,000
Accounts payable 950,000 980,000
• Total sales were P12,000,000 for 2025 and P11,000,000 for 2024. Cash sales were 20%
of total sales each year. Cost of goods sold was P8,400,000 for 2025.
• Variable expenses for 2025 amounted to P1,200,000 and varied in proportion to sales.
Variable expenses had been paid 50% in the year incurred and 50% the following year.
• Fixed expenses, including P350,000 depreciation and P50,000 bad debt expense,
totaled P1,000,000 each year. Eighty percent of fixed expenses involving cash were paid
in the year incurred and 20% the following year. Each year there was a P50,000 bad debt
estimate and a P50,000 write-off.
Question 1: What is the cash collected from customers during 2025?
a. P12,010,000 c. P11,960,000
b. P12,060,000 d. P11,890,000
Question 2: What is the amount of purchases for 2025?
a. P9,800,000 c. P8,500,000
b. P8,300,000 d. P8,400,000
Question 3: What is the cash disbursed for purchases during 2025?
a. P8,500,000 c. P8,300,000
b. P8,270,000 d. P8,200,000
Question 4: What amount of cash was disbursed for variable expenses during 2025?
a. P1,150,000 c. P1,100,000
b. P1,200,000 d. P600,000
Question 5: What amount of cash was disbursed for fixed expenses during 2025?
a. P500,000 c. P600,000
b. P650,000 d. P500,000
