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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Preparing a Statement of Cash Flows

Monon Cable Television Company reported the following financial statements for 20l9:

Chapter 11, Problem 56PSA, Preparing a Statement of Cash Flows Monon Cable Television Company reported the following financial

Required:

1. Prepare a statement of cash flows using the indirect method to compute net cash flow from operating activities.

2. CONCEPTUAL CONNECTION Explain what has been responsible for the decrease in cash.

To determine

(a)

A cash flow statement is a budget report that gives total information in regard to all cash inflows an organization gets from its continuous tasks and outside venture sources, just as all cash outflows that compensation for business activities and speculations amid a given period.

To compute:

Prepare a statement of cash flow using the indirect method to compute net cash flow from operating activities.

Explanation

In the book of Monon Cable Television

Statement of cash flow operating activity

...
Particular Detail ($) Amount ($)
Net income before tax as per income statement 49000
Depreciation expense 28000
Gain on disposal of assets (800)
Interest expense 1800 29000
To determine

(b)

The ending balance of a cash-flow statement will constantly level with the cash sum appeared on the organization’s balance sheet. Cash flow is, by definition, the adjustment in an organization’s cash starting with one period then onto the next. Consequently, the cash-flow statement should dependably balance with the cash account from the balance sheet.

To discuss:

Explain what has been responsible for the decrease in cash.

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