Requirement 1
Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.
Direct method: This method uses the basis of cash for preparing the cash flows statement.
Cash flows from operating activities: In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.
The below table shows the way of calculation of cash flows from operating activities:
Cash flows from operating activities (Direct method) |
Add: Cash receipts. |
Cash receipt from customer |
Less: Cash payments: |
To supplier |
For operating expenses |
Income tax expenses |
Net cash provided from or used by operating activities |
To Compute: The cash collections from customers.
Requirement 2
To Compute: The amount of cash payment for merchandise inventory.
Requirement 3
To Compute: The amount of cash payment of operating expenses.
Requirement 4
To Compute: The acquisition of property and equipment.
Requirement 5
To Compute: The amount of borrowings
Requirement 6
To Compute: The cash receipt from issuance of common stock
Requirement 7
To Compute: The payment of cash dividends.
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