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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ACCOUNTING,CHAP.1-13
- Laser World's income statement reported total revenues of $920,000 and total expenses (including $44,500 depreciation) of $775,000. The balance sheet reported the following: Accounts Receivable-beginning balance, $57,000 and ending balance, $59,000; Accounts Payable-beginning balance, $23,000 and ending balance, $29,000. Therefore, based only on this information, the net cash flows from operating activities were: eBook Multiple Choice $96,800. $149,000. $185,650 O $193,500. Mc Graw Hill P Type here to search Ps Ps 98% A 4x A dx 6 *** Prtse Isert Delete F10 FII F1R & * 3 5 Num Lock 4 6 8. 9. Backspace T U G J K Enter V B > Shi Alt * Pgup Alt Ctrl Home PgDn : - O O O Oarrow_forwardStaley 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_forwardStaley Inc. reported the following data: Line Item Description Amount Net income $449,900 Depreciation expense 55,600 Loss on disposal of equipment 32,900 Increase in accounts receivable 20,800 Increase in accounts payable 10,500 Prepare the "Cash flows from (used for) operating activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. blankStaley Inc.Statement of Cash Flows (partial) Line Item Description Amount Amount Cash flows from (used for) operating activities:    $Net income  Adjustments to reconcile net income to net cash flows from (used for) operating activities:    Depreciation   Loss on disposal of equipment  Changes in current operating assets and liabilities:    Increase in accounts receivable   Increase in accounts payable  Net cash flows from operating activities  $Net cash…arrow_forward
- Staley Inc. reported the following data:Â Net income: $465,400Â Depreciation expense: $68,100Â Loss on disposal of equipment: $29,900Â Â Increase in accounts receivable: $21,700 Increase in accounts payable: $12,700Â Â Compute cash flow from operating activitiesarrow_forwardSmoltz 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_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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