Concept explainers
Statement of
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Cash flows from investing activities:
Cash provided by or used in investing activities is a section of statement of cash flows. It includes the purchase or sale of equipment or land, or marketable securities, which is used for business operations.
Cash flows from financing activities:
Cash provided by or used in financing activities is a section of statement of cash flows. It includes raising cash from long-term debt or payment of long-term debt, which is used for business operations.
Cash flows from operating activities:
These refer to the cash received or cash paid in day-to-day operating activities of a company. In this direct method, cash flow from operating activities is computed by using all cash receipts and cash payments during the year.
To Write: A brief memo to the Vice President analyzing the cash flow information of Incorporation T.
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EBK FINANCIAL & MANAGERIAL ACCOUNTING
- Staley Inc. reported the following data:Net income $396,200Depreciation expense 61,250Loss on disposal of equipment 27,600Increase in accounts receivable 9,000Increase in accounts payable 3,350Prepare the “Cash flows from operating activities” section of the statement of cash flows, using the indirect method.arrow_forwardThe following information pertains to Peak Heights Company: Income Statement for Current Year Sales $ 85,200 Expenses Cost of goods sold Depreciation expense Salaries expense $51,875 7,400 11,800 71,075 $ 14,125 Net income Prior Partial Balance Sheet Accounts receivable Inventory Salaries payable Current year $10,900 S 14,200 13,800 1,580 year 8,600 970 Required: Present the operating activities section of the statement of cash fl outflows as negative amounts.)arrow_forwardBurch Company Income Statement For the year ended December 31 Sales $250,000 Cost of goods sold (160,000) Depreciation expense (26,400) Other expenses (35,000) Income tax expense (12,000) Net income $16,600 Required: Compute the net cash flows from operating activities using the indirect method. 33,200 Xarrow_forward
- Smoltz Company reported the following information for the current year: cost of goods sold, $252,500; increase in inventory, $21,700; and increase in accounts payable, $12,200. What is the amount of cash paid to suppliers that Smoltz would report on its statement of cash flows under the direct method? a. $218,600 c. $262,000 b. $243,000 d. $286,400arrow_forwardReporting changes in equipment on statement of cash flows An analysis of the general ledger accounts indicates that delivery equipment, which cost 75,000 and on which accumulated depreciation totaled 58,000 on the date of sale, was sold for 20,200 during the year. Using this information, indicate the items to be reported on the statement of cash flows.arrow_forwardCOMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2.arrow_forward
- COMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Horn Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-9A for Horn Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Horn Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Horn Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.arrow_forwardCOMPUTE CASH PROVIDED BY OPERATING ACTIVITIES Powell Companys condensed income statement for the year ended December 31, 20-2, was as follows: Additional information obtained from Horns comparative balance sheet and auxiliary records as of December 31, 20-2 and 20-1, was as follows: Depreciation expense for 20-2, included in operating expenses on the income statement, was 32,000. REQUIRED Prepare a partial statement of cash flows reporting cash provided by operating activities for the year ended December 31, 20-2. SCHEDULE FOR CALCULATION OF CASH GENERATED FROM OPERATING ACTIVITIES Using the information provided in Problem 23-11B for Powell Company, prepare the following: 1. A schedule for the calculation of cash generated from operating activities for Powell Company for the year ended December 31, 20-2. 2. A partial statement of cash flows for Powell Company reporting cash from operating activities under the direct method for the year ended December 31, 20-2.arrow_forward
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