Republic of the Philippines

Department of Education
National Capital Region
DIVISION OF CITY SCHOOLS – MANILA
Manila Education Center Arroceros Forest Park
Antonio J. Villegas St. Ermita, Manila

FABM2

By: J. Tuyado

Cash Flow Statement

Quarter 1 Week 5 Module 5

Learning Competency:
Discuss the Components,
Structure, and Preparation of
Cash Flow Statement of a
Single Proprietorship Business
(ABM_FAB/M12-If-9)
 Learning Module for Accountancy, Business and Management

HOW TO USE THIS MODULE?

Before starting the module, I want you to set aside other task/s that may
disturb you while enjoying the lessons. Read the simple instructions below
to successfully enjoy the objectives of this kit. Have fun!

1. Follow carefully all the contents and instructions indicated in

every page of this module.
2. Write on your notebook the concepts about the lessons. Writing
enhances learning that is important to develop and keep in mind.
3. Perform all the provided activities in the module.
4. Let your facilitator/guardian assess your answers using the
answer key card.
5. Analyze conceptually the posttest and apply what you have
learned.
6. Enjoy studying!

PARTS OF THE MODULE

Expectations - These are what you will be able to know

after completing the lessons in the module.
Pre-test - This will measure your prior knowledge and the concepts
to be mastered throughout the lesson.
Looking Back to your Lesson - This section will measure what
learnings and skills did you understand from the previous lesson.
Brief Introduction- This section will give you an overview of the
lesson.
Activities - This is a set of activities you will perform with a partner.
Remember - This section summarizes the concepts and applications
of the lessons.
Check your Understanding - It will verify how you learned from the
lesson.
Post-test - This will measure how much you have learned from
the entire module.

2
 Learning Module for Accountancy, Business and Management

The Components, Structure and

LESSON
Preparation of a Cash Flow Statement
5

EXPECTATIONS

You will represent real-life situations using cash flow statement (CFS)

Specifically, this module will help you:

 
 discuss the components and structure of cash flow statement

prepare a cash flow statement for a single proprietorship

PRETEST

Let us start your journey in

learning more on CFS. I am sure you are
ready and excited to answer the Pretest.
Enjoy answering!

Directions: Using the choices provided, indicate the presence of each

transactions below in a cash flow statement prepared under the direct method.
Write your answer in a yellow paper.

A. Operating activities
B. Financing activities
C. Investing activities

1. Additional investment 8. Professional Fees

2. Rent expense 9. Transportation Expense
3. Rendered services for cash 10. Rental Revenue
4. Payment of wages 11. Cash from sale of equipment
5. Cash receipts from receivables 12. Payment of s0upplies
6. Payment of Insurance 13 Purchase of Equipment
7. Payment of notes payable 14. Payment of furniture

3
 Learning Module for Accountancy, Business and Management

Great, you finished answering the

questions. You may request your
facilitator to check your work.
Congratulations and keep on
learning!

LOOKING BACK TO YOUR LESSON

Directions: Write true if the statement is correct and false if the statement is
incorrect in a yellow paper.

_______1. Heading shows the name of business, the statement of changes in

owner’s equity and the date.

_______2. The owner of a cooperative is called shareholders.

_______3. Two or more partners combined their properties, cash and skills is
called single proprietorship business.

_______4. Loss is deducted from the owner’s equity account.

_______5. Additional investment is added to the owner’s equity account

_______6. The owner of a single proprietorship business are partners.

_______7. Drawings are added to the owner’s equity account.

_______8. Net income will appear in the Statement of Comprehensive income

and Statement of Changes in Owner’s Equity Account.

_______9. Drawing account is not seen in the Statement of Financial Position

because it is deducted already in the statement of Changes in Equity

_______10. The equity in Single proprietorship business is the same with equity
in the Partnership business.

4
Learning Module for Accountancy, Business and Management

BRIEF INTRODUCTION

A cash flow statement is a summary of money coming into (source or

receipt) and going out (use or payment) of the business for an accounting
period, (monthly, quarterly semi-annually, and annually).

Activities of cash flows are operating activities, investing activities and

financing activities. Operating activities are the day-to-day results of the
operations such as buying and selling of goods and services. Investing activities
include investments in future business activities such as purchasing property,
and equipment and financing activities are how a business finances itself such
as investment and withdrawals of the owner.

The following are the examples under its activities:

1. Cash flows from operating activities:

a. Receipts from income

b. Payment for expenses and employees

c. Payment for purchase of inventory

d. Cash receipts form interest income

2. Cash flows from investing activities:

a. payment for purchase of plant, property, and equipment

b. Cash receipts from selling plant, property and equipment

3. Cash flows from financing activities:

a. Cash receipts of the owner from investment

b. Cash payments on withdrawals by the owner

c. The money the business borrows.

d. Money paid by the business on payment of loans

5
Learning Module for Accountancy, Business and Management
The structure of cash flows:

Reporting of cash flows may be presented using either the direct method
or indirect method. Below is an example of direct method of cash flows.

COMPANY NAME
Cash Flow Statement
For the year ended December 31, 2019

Cash flows from operating activities:

Cash receipts from sales of goods Phpxxx

Cash receipts from interest income xxx

Cash paid for purchase of inventory (xxx)

Cash paid for expenses (xxx)

Net cash flows from operating activities Phpxxx

Cash flows from investing activities

Cash payment from purchase of fixed assets Phpxxx

Cash receipts from sale of fixed assets (xxx)

Net cash flows from investing activities Phpxxx

Cash flows from financing activities

Cash receipts from investment Php xxx

Cash payments of withdrawals (xxx)

Cash receipts from loan xxx

Cash payments of loan (xxx)

Net cash flows from financing activities Phpxxx

Increase/(decrease) of cash Phpxxx

Cash, January 1 xxx

Cash, December 31 Php xxx

=======

6
 Learning Module for Accountancy, Business and Management

ACTIVITIES

Activity 1.

Directions: Below are the accounts taken from the ledger of Maan Bakeshop.
Choose from operating activities, investing activities, or financing activities for
your answer and write it in a yellow paper.

1. Purchase of equipment.

2. Investment by the owner.

3. Payment of rent.

4. A loan from the bank.

5. Withdrawals made by the owner.

6. Cash sales from various customers.

7. Payment of wages of staff.

8. Payment of bakeshop supplies.

9. Repayment of loan.

10. Cash receipt from selling of old fixed asset.

Activity 2.

Directions: Using the choices provided, indicate the presence of each of the
transactions below. Write your answers in a yellow paper.

Multiple Choice: (Choices may be used more than once.)

A. Cash inflow from operating

B. Cash outflow from operating
C. Cash inflow from investing
D. Cash outflow from investing

7
 Learning Module for Accountancy, Business and Management
E. Cash inflow from financing
F. Cash outflow from financing
TRANSACTIONS:

1. Payment of rent

2. The additional investment made by the owner

3. Payment of furniture

4. Receipts from sales of goods

5. Payment of Salaries

6. Cash receipts from sale of the old equipment

7. Withdrawals of the owner

8. Cash receipts from notes payable

9. Payment of utilities

10. Cash receipts from interest income

Activity 3.

Directions: Solve for the (1) net cash flow from investing activity (2) net cash
flow from operating activities, and (3) net cash flow from financing activities
from the following transactions taken from TMAM (Tito Martinez & Atienza
Marie) transport as of March 31, 2020. Write your answer in a yellow paper.

1. The owner of the business, Tito made an additional investment of

Php20,000 in the business.

2. Cash receipts from services rendered Php58,000.00.

3. Payment of percentage tax of Php300.00.

4. The owner borrowed cash Php30,000.00 from Martienza Financing.

5. The company paid his driver for Php10,000.00

8
 Learning Module for Accountancy, Business and Management
6. Paid utilities amounting to Php550.00.

7. Repairs and maintenance amounting to Php3,400.00.

8. Paid gasoline amounting to Php1,200.00.

9. Sold old furniture amounting to Php20,000.00.

10. The own7er withdrew cash from the business amounting to Php7,000.00.

REMEMBER

The statement of cash flows indicated how the company obtained and used
its money during the accounting period. The operating activity section indicates the
company’s ability to generate cash from sales to meet its current cash needs and
the investing activity was used to expand the company and financing activity was
used to pay back bank or pay the owners in terms of withdrawals.

CHECK YOUR UNDERSTANDING

Directions: Multiple Choice. Choose the letter corresponding to the correct

answer for each of the questions provided below. Write your answers in a yellow
paper.

1. How an additional investment is classified in the cash flow statement?

a. Operating activity
b. Financing activity
c. Investing activity
d. None of the above
2. How is a payment of expenses classified in the cash flow statement?
a. Operating activity
b. Financing activity
c. Investing activity
d. None of the above

9
Learning Module for Accountancy, Business and Management

3. How are cash receipts from sales of goods classified in the cash
flow statement?
a. Operating activity
b. Financing activity
c. Investing activity
d. None of the above

4. How is repayment of a loan to banks classified in cash flow statement?

a. Operating activity
b. Financing activity
c. Investing activity
d. None of the above

5. How is the acquisition of fixed assets classified in cash flow statement?

a. Operating activity
b. Financing activity
c. Investing activity
d. None of the above

POSTTEST

Directions: Prepare the statement of cash flow for Angel’s Photocopy Shoppe.
On June 30, 2020, after six months of operations, the following balances were
obtained from the trial balance. All transactions are in cash. Cash balance for
June 1, 2020 is Php25,000.00.
Angel’s Capital Php220,000.00 Service Rendered Php75,000.00
Photocopy Repairs Expenses Php2,800.00
Equipment Php45,000.00 Furniture Php4,000.00
Supplies Php25,000.00 Utilities Expense Php7,500.00
Angel’s Drawing Php8,000.00 Loan Payable Php8,000.00
Taxes Expense Php2,000.00 Rent Expense Php35,000.00
10
Learning Module for Accountancy, Business and Management

REFLECTIVE LEARNING

The way we live nowadays is totally different

from what we used to have. We cannot go out without
the mask. We always observe social distancing. Mass
gatherings are not allowed. Education all over the
Philippines are online or blended learning. There are
advantages and disadvantages of the new normal life
we are now experiencing. Can you list down all the
advantages and disadvantages? Remember the cash
flow as the title of your reflection.

RE

Advantages Disadvantages
(increases cash flows) (decreases cash flows)

https://theskillcollective.com/blog/coronavirus-new-normal

E-SITES

To be able to practice the skills you have learned in this module about
cash flows, you can visit the following sites:

www.accountingcoach.com

https://www.investopedia.com/investing/what-is-a-cash-flow-statement/

11
Learning Module for Accountancy, Business and Management

REFERENCES

Ferrer, R. and Millan, Z. V. ( 2017). Fundamentals of Accountancy, Business &

Management Part 2. 1st Edition

Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.). Mandaluyong
City, Philippines: Valencia Educational Supply.

Anastacio, V. (2011). Accounting Essentials 1, Centro Escolar University

Publisher
https://www.flickr.com/photos/160866001@N07/48788337828
https://www.freeimg.net/photo/1779926/money-coins-euro-cent

Acknowledgment

Writer : Ma. Cristina A. Labay, MM

Editor : Isabel A. Gumaru, DBA
Evaluator : Ellaine I. Dela Cruz, DBA

Validators &
Reviewers: Remylinda T. Soriano, EPS
Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS
LayoutArtist &
Illustrator: Ma. Cristina A. Labay, MM

Management Team :

Maria Magdalena M. Lim, Schools Division

Superintendent, Manila
Aida H. Rondilla, Chief Education Supervisor
Lucky S. Carpio, EPS in charge of LRMDS
Lady Hannah C. Gillo, Librarian II, LRMDS

12
Learning Module for Accountancy, Business and Management

ANSWER KEY

PRETEST

1. B. Financing 8. A. Operating
2. A. Operating 9. A. Operating
3. A. Operating 10. A. Operating
4. A. Operating 11. C. Investing
5. A. Operating 12. A. Operating
6. A. Operating 13. C. Investing
7. B. Financing 14. C. Investing

LOOKING BACK TO YOUR LESSON:

1. True 6. False
2. False 7. False
3. True 8. True
4. True 9. True
5. True 10. False

ACTIVITIES:

Activity 1

1. Investing 6. Operating
2. Financing 7. Operating
3. Operating 8. Operating
4. Financing 9. Financing
5. Financing 10. Investing

13
Learning Module for Accountancy, Business and Management
Activity 2:

1. B 6. C
2. E 7. F
3. D 8. E
4. A 9. B
5. B 10. A

Activity 3

1. Operating Activities Php42,550

Cash inflows Php58,000 less Cash Outflows (Php15,450.)
2. Investing Activities Php20,000.00.
Cash inflow Php20,000.00 less Cash outflows ( 0 )
3. Financing Activities Php43,000.00
Cash Inflows Php50,000.00 less Cash Outflows (Php7,000.00)

CHECK YOUR UNDERSTANDING:

1. B
2. A
3. A
4. B
5. C

14
 Learning Module for Accountancy, Business and Management
POSTTEST

COMPANY NAME
Cash Flow Statement
For the month ended June 30, 2019

Cash flows from operating activities:

Cash receipts from services rendered Php75,000

Cash paid for rent expense (35,000)
Cash paid for supplies ( 5,000)
Cash paid for utilities expense (7,500)
Cash paid for repairs expense (2,800)
Cash paid for taxes expense (2,000)
Net cash flows from operating activities Php2,700

Cash flows from investing activities

Cash payment from purchase of equipment (Php45,000)

Cash payment from purchase of furniture (4,000)
Net cash flows from investing activities (Php49,000)

Cash flows from financing activities

Cash Receipts from investment Php220,000

Cash receipts from loans payable 8,000
Cash payments of withdrawals (8,000)
Net cash flows from financing activities Php220,000
Increase of cash Php173,700
Cash, January 1 25,000
Cash, December 31 Php198,700
==========

15
Learning Module for Accountancy, Business and Management

16
Learning Module for Accountancy, Business and Management

17
Learning Module for Accountancy, Business and Management

18