Requirement 1
Cash and cash equivalent:
Cash and cash equivalent are highly liquid, short term investments, which could be held by a company for not more than three months from the purchase date. Cash and cash equivalents are an asset; hence it is shown in the balance sheet.
To determine: The amount of increase or decrease in cash and cash equivalents of Company B.
Requirement – 2
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.
To determine: The amount of net cash flow from operating activities, and largest reconciling item of recent year. Also determine whether there is increase or decrease in net cash flow from operating activity each year.
Requirement – 3
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 flow from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company.
To determine: The amount of net cash flow from investing activities, and largest investing item of recent year. Also determine whether there is positive or negative in net cash flow from investing activity each year.
Requirement – 4
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 flow from financing activities: This section of cash flows statement provides information about the
To determine: The amount of net cash flow from financing activities, and largest financing item of recent year. Also determine whether negative financing activities are good sign or bad sing.
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FIN ACCT AC W/EBOOK CUSTOM PRICING
- Using the Exhibit below, assume that the balance of Accounts Receivable was $61,000 at the beginning of the current year. Furthermore, assume that the balance of Accounts Receivable is $62,000 at the end of the current year. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of accounts receivable on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on…arrow_forwardThe change in cash for the year can be calculated by comparing the balance of cash reported in this year’s and last year’s balance sheet. Why is the statement of cash flows needed?arrow_forwardExercise 7-16: From the following list, identify whether the change in the account balance during the year would be added to or deducted from net income when the indirect method is used to determine cash flows from operating activities: Increase in accounts receivable Decrease in accounts receivable Increase in notes receivable Decrease in notes receivablearrow_forward
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