Cash Flow Statement:
Cash flow statement is that statement in which, transaction related to cash are recorded. It is mandatory report and included in the financial statement of the
company. It is divided into three parts operating activities, investing activity, and financial activity
Operating Activity:
Operating activity is the first part of the cash flow statement. The main focuses of the operating activity on the
Financial Activity:
Financial activity is the part of the cash flow statement. Financial activity involves the long term liability, borrowing and
Investing Activity:
Investing activity is the third part of the cash flow statement which gives the information related to the acquisition and disposal of the long term assets of the company such as land and building, investment and plant.
To Prepare: Cash flow statement by direct method.
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Chapter 12 Solutions
FINANCIAL ACCOUNTING FUNDAMENTALS W/ CO
- Refer to the information for Cornett Company above. What amount should Cornett report on its statement of cash flows as net cash flows provided by investing activities? a. $(5,200) b. $55,200 c. $144,800 d. None of thesearrow_forwardThe financial statements for Romeo and Company follow. Assume that the additional investment and the withdrawals were in the form of cash. Required Prepare a statement of cash flows for the year ended December 31, 2018. Check Figure Net cash flows from operating activities, 172,000arrow_forwardCalculate cash balances based on the information provided in the chart below and show me how you did it Pro Forma Cash Flow Cash Received Cash from Operations Cash Sales $24,198 $100,099 $122,460 Cash from Receivables $46,108 $217,218 $342,905 Subtotal Cash from Operations $70,306 $317,317 $465,366 Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $40,000 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $70,306 $357,317 $465,366 Expenditures Year 1 Year 2 Year 3 Expenditures from Operations Cash Spending $167,000 $225,200 $229,200 Bill Payments $75,294 $124,114 $152,785 Subtotal Spent on Operations $242,294 $349,314 $381,985 Additional Cash Spent Sales Tax,…arrow_forward
- 5 Required information Exercise 12-10A (Algo) Determining cash flows from investing activities LO 12-3 [The following information applies to the questions displayed below.] The following accounts and corresponding balances were drawn from Delsey Company's Year 2 and Year 1 year-end balance sheets: Account Title Investment securities Machinery Land Year 2 $ 103,400 521,300 145, 100 Year 1 $ 114,400 425, 100 91,800 Other information drawn from the accounting records: 1. Delsey incurred a $1,330 loss on the sale of investment securities during Year 2. 2. Old machinery with a book value of $4,130 (cost of $25,010 minus accumulated depreciation of $20,880) was sold. The income statement showed a gain on the sale of machinery of $4,980, 3. Delsey did not sell land during the year.arrow_forwardQ5. Use the following information about the calendar-year cash flows of MacArthur Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities. Cash and cash equivalents, beginning-year balance $ 18,000 Cash and cash equivalents, year-end balance Cash payments for merchandise inventory Cash paid for store equipment Cash borrowed on three-month note payable Cash dividends paid Cash paid for salaries Cash payments for other operating expenses Cash received from customers Cash interest received Answer: 78,750 75,750 15,750 22,500 12,000 39,000 48,000 220,500 8,250arrow_forwardExercise 12-12 (Algo) Indirect: Preparing statement of cash flows LO P2, P3, A1 Skip to question [The following information applies to the questions displayed below.] The following financial statements and additional information are reported. IKIBAN INCORPORATED Comparative Balance Sheets At June 30 2021 2020 Assets Cash $ 97,900 $ 60,000 Accounts receivable, net 89,000 67,000 Inventory 79,800 110,500 Prepaid expenses 6,000 8,600 Total current assets 272,700 246,100 Equipment 140,000 131,000 Accumulated depreciation—Equipment (35,000) (17,000) Total assets $ 377,700 $ 360,100 Liabilities and Equity Accounts payable $ 41,000 $ 54,000 Wages payable 7,600 18,200 Income taxes payable 5,000 7,000 Total current liabilities 53,600 79,200 Notes payable (long term) 46,000 76,000 Total liabilities 99,600 155,200 Equity Common stock, $5 par value 252,000 176,000 Retained earnings 26,100 28,900 Total liabilities and equity $ 377,700 $…arrow_forward
- Use the following information about Ferron Company to prepare a complete statement of cash flows (direct method) for the current year ended December 31. Use a note disclosure for any noncash investing and financing activities. Cash and cash equivalents, P5 Dec. 31 prior year-end $ 40,000 Cash and cash equivalents, Dec. 31 current year-end 148,000 Cash received as interest 3,500 Cash paid for salaries 76,500 Bonds payable retired by issuing common stock (no gain or loss on retirement) . 185,500 Cash paid to retire long-term notes payable . 100,000 Cash received from sale of equipment . 60,250 Cash received in exchange for six-month note payable $ 35,000 Land purchased by issuing long-term note payable 105,250 Cash paid for store equipment 24,750 Cash dividends paid . 10,000 Cash paid for other expenses 20,000 Cash received from customers 495,000 Cash paid for inventory 254,500arrow_forwardCash received from long-term notes payable Purchase of investments Cash dividends paid. Interest paid Financing Activities Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.) Cash received from long-term notes payable Cash dividends paid Cash provided by financing activities $ 66,000 16,500 $ 52,800 26,400 66,000 (52,800) 13,200arrow_forwardExtract from the statement of financial position as at 30 June 2021 30 June 2021 30 June 2020 R R Inventories 302 000 292 000 Trade receivables 690 000 720 000 Trade payables 400 000 385 000 Taxation payable 75 000 60 000 Prepaid expenses 8 000 2 000 Accrued expenses 84 000 88 000 Required: Prepare only the "Cash generated by operations" section of the statement of cash flows for the year ended 30 June 2021, using the indirect methodarrow_forward
- ccClassify each cash transaction between Operating (O), Investing (I), or Financing (F) activities using the following data: __Cash at the beginning of the year: $650,000 Cash Receipts from: __Bank (Interest on CD) $6,000 __Customers Sales $872,000 __Interest $33,000 __Dividends $3,600 Cash payments for: __Dividends $2,500 __Raw Materials $ 3,800 __Wages Expense $4,000 __Land $10,000 __Interest $4,000arrow_forwardCash received from long-term notes payable Purchase of investments Cash dividends paid Interest paid Financing Activities $ 56,000 14, 200 Compute cash flows from financing activities using the above company information. Note: Amounts to be deducted should be indicated by a minus sign. $ 45,600 22,800 0arrow_forwardTEST III: Prepare the cash position report of ABC's Company with complete headings as of June 16, 20 provided the following transactions was incurred on each bank account: PREPARE CASH POSITION IN CONSOLIDATED FORMAT PARTICULARS Bal. As of 6.15.2000 Collections of loans: OR# 0001 OR# 0002 OR# 0003 OR# 0004 Passbook Fees OR# 0005 Receipt of fund from Funding Agency Loan Releases: CV# 0001 CV# 0002 CV# 0003 CV# 0004 Payment Utilities CV# 0005 LAND BANK 5,000.00 250.00 650.00 150.00 150.00 375.00 25,000.00 10,000.00 35,000.00 875.0 SOLID BANK 2,500.00 250.00 50,000,00 UCPB 1,000.00 PNB 5,000.00 Iarrow_forward
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