Statement of cash flows: Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company. Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Cash flow from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company. Cash flow from financing activities: This section of cash flows statement provides information about the cash inflow and outflow as a result of issuance and financing of debt, issue of new stock and payment of dividends. To indicate: The given items affect operating (O) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction, and whether it represents a cash inflow or cash outflow or has no cash flow effect.

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Chapter 11, Problem 11.1BP

To determine

Statement of cash flows:

Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Cash flow from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company.

Cash flow from financing activities: This section of cash flows statement provides information about the cash inflow and outflow as a result of issuance and financing of debt, issue of new stock and payment of dividends.

To indicate: The given items affect operating (O) activities, investing (I) activities, financing (F) activities, or is a noncash (NC) transaction, and whether it represents a cash inflow or cash outflow or has no cash flow effect.

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Listed below are several transactions. For each transaction, indicate by letter whether the cash effect of each transaction is reported in a statement of cash flows as an operating (O), investing (I), financing (F), or noncash (NC) activity. Also, indicate whether the transaction is a cash inflow (CI) or cash outflow (CO), or has no effect on cash (NE). The first answer is provided as an example.

. Give two examples of cash receipts and two examples of cash payments that fit into each of the following classifications: a. Operating activities. b. Investing activities. c. Financing activities. 2. Why are payments and receipts of interest classified as operating activities rather than as financing or investing activities?

How should significant non-cash transactions be reported in the statement of cash flows? a. They should be incorporated in the statement of cash flows in a section labeled, "Significant Noncash Transactions." O b. Such transactions should be incorporated in the section (operating, financing, or investing) that is most representative of the major component of the transaction. O c. These noncash transactions are not to be incorporated in the statement of cash flows. They appear in a note to the financial statements. O d. They should be handled in a manner consistent with the transactions that affect cash flows.