1. Below are the cash transactions of Kenya Co. for December 31, 2019:
Cash payment to suppliers of goods and services P 25,000
Cash receipts from rendering of services 50.000
Payment to owners 5,000
Proceeds from bank loans 25,000
Proceeds from cash investment of owners 115,000
Payment for acquisition of equipment 100,000
Cash at the beginning of the year 1,000,000
Requirements:
1. How much is cash flow from operating activities?
2. How much is cash flow from investing activities?
3. How much is cash flow from financing activities?
4. How much is the net increase or decrease in cash for the year?
5. How much is cash as of December 31, 2019.
1.) CASH FLOW FROM OPERATIONS
Cash received - Services. 50,000
Less cash paid - Suppliers. 25,000
Net cash flow from operations. 25,000
2.) CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from investment. 115,000
Less. Purchase of equipment. 100,000
Net cash flow from investment 15,000
3.) CASH FLOW FROM FINANCING ACTIVITIES
Proceed from bank loan. 25,000
Less Payment to owners. 5,000
Net cash flow from financing. 20,000
4.) NET CASH INCREASE/DECREASE
Net cash increase/decrease= cash flow from operations+cash flow from investment+ cash flow from financing
Net cash increase= 25,000+15,000+20,000 = 60,000
5.) CASH AS AT DECEMBER 31,2019
Cash at end of year= Net increase in cash + Cash at beginning of year
Cash at year end= 60,000+1000 = 61,000
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