(a) Introduction: Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services. To comment: On the difference between company’s net income and cash flow from operations.

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Answer 1

Question

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

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Answer 2

Question

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

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Answer 3

Question

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

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Answer 4

Question

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

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Answer 5

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

Answer 6

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

Answer 7

Chapter 12, Problem 17E

To determine

(a)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To comment:

On the difference between company’s net income and cash flow from operations.

Answer 8

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

Answer 9

To determine

(b)

Introduction:

Cash flow from operations measure cash flows related to day-to-day activities. Operating income and operating expenses for the year forms the part of operating activities. It includes cash flows related to buying and selling of goods and services.

To state:

If external financing is required to fund its purchase of fixed assets or not.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - What information does the statement of cash flows...Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author explains that cash flow from operations measures cash flows related to day-to-day activities. Depreciation or amortization is considered a non-cash expense which is deducted from income statement.

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