Analyzing Changes in Balance Sheet Accounts
A review of the balance sheet of Mathews Company revealed the following changes in the account balances:
a. Increase in accounts receivable
b. Increase in retained earnings
c. Decrease in salaries payable
d. Increase in common stock
e. Decrease in inventory
f. Increase in accounts payable
g. Decrease in long-term debt
h. Increase in property, plant, and equipment
Required:
For each of the above items, indicate whether it produces a cash inflow or a cash outflow.
2. Classify each change as a cash flow from operating activities (indirect method), cash flow from investing activities, or cash flow from financing activities.
(a)
Introduction:
Cash Flow from Financing Activities represents inflows and outflows of cash coming about because of obligation issuance and financing, the issuance of any new stock, profit installments, and any repurchase of existing stock.
A cash flow statement is a financial statement that gives aggregate data regarding all cash inflows a company gets from its continuous operations and external venture sources, as well as all cash outflows that pay for business activities and speculations amid a given period.
To choose:
For each of the above item, indicate whether it produce a cash inflow or a cash outflow.
A review of the balance sheet of Mathews Company revealed the following changes in the account balances:
For each of the above item, indicate whether it produce a cash inflow or a cash outflow.
Particular | Item | Reasons |
a. Increase in accounts receivable | Cash outflow | when goods have produced then expense has been incurred and yet now sale or credit basic and cash yet not received |
b. Increase in retained earnings | Cash inflow | Because from the retained earning yet not paid dividend. |
c. Decrease in salaries payable | Cash outflow | The Decrease in salaries means paid salary and result come outflow |
d... |
(b)
Introduction:
Cash Flow from Financing Activities represents inflows and outflows of cash coming about because of obligation issuance and financing, the issuance of any new stock, profit installments, and any repurchase of existing stock.
A cash flow statement is a financial statement that gives aggregate data regarding all cash inflows a company gets from its continuous operations and external venture sources, as well as all cash outflows that pay for business activities and speculations amid a given period.
To choose:
Classify each change as a cash flow from operating activities (indirect method), cash flow from investing activities, or cash flow from financing activities.
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