Explanation 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. Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities . A cash flow statement includes the following three components. Cash flows from operating activities: Cash flows from operating activity represent the net cash flows from the general operation of the business by comparing the cash receipt and cash payments. 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. Prepare a statement of cash flow for P Media Corporation for the year ended December 31, 2018. Corporation P Statement of Cash Flows - Indirect Method Year Ended December 31, 2018 Particulars Amount ($) Amount ($) Cash flows from operating activities: Net Income 19,000 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation expense 11,000 Increases in accounts receivable (3) (4,500) Increase in accounts payable (3) 3,500 10,000 Net cash used by operating activities 29,000 Cash flows from investing activities: Purchase of plant assets (21,000) Net cash used by investing activities (21,000) Cash flows from financing activities: Cash receipts from issue of common stock (1) 4,000 Cash receipts from issue of notes payable 4,400 Payment of cash dividends (2) (7,900) Payment of notes payable (7,400) Net cash used in financing activities (6,900) Net increase in cash 1,100 Add : Cash balance at December 31, 2017 3,900 Cash balance at December 31, 2018 5,000 Table (1) The statement of cash flows starts with the cash flows from operating activities, which includes net income and the adjustments to reconcile net income to net cash from operating activities to determine the net cash flows from operating activities. The next section is the cash flows from investing activities, which adds the sale of assets and deducts the purchase of assets to determine the net cash flows / (used) for investing activities. The third section is the cash flows from financing activities, which adds issue of stock and deducts the payments of dividends to determine the net cash provided by / used for financing activities...

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Chapter C, Problem 8SE

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Prepare the statement of cash flows under indirect method.

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Ch. C - Prob. 2QC Ch. C - Prob. 3QC Ch. C - Prob. 4QC Ch. C - Prob. 5QC Ch. C - Prob. 6QC Ch. C - Prob. 7QC Ch. C - Prob. 8QC Ch. C - Prob. 9QC Ch. C - Prob. 10QC Ch. C - Prob. 1RQ Ch. C - Prob. 2RQ Ch. C - Prob. 3RQ Ch. C - Prob. 4RQ Ch. C - Prob. 5RQ Ch. C - Prob. 6RQ Ch. C - Prob. 7RQ Ch. C - If a company experienced a loss on disposal of...Ch. C - Prob. 9RQ Ch. C - Prob. 10RQ Ch. C - Prob. 11RQ Ch. C - Prob. 12RQ Ch. C - Prob. 13RQ Ch. C - Prob. 14RQ Ch. C - How does the direct method differ from the...Ch. C - Prob. 16RQ Ch. C - Prob. 1SE Ch. C - Prob. 2SE Ch. C - Prob. 3SE Ch. C - DVR Equipment, Inc. reported the following data...Ch. C - Prob. 5SE Ch. C - Prob. 6SE Ch. C - Prob. 7SE Ch. C - Prob. 8SE Ch. C - Prob. 9SE Ch. C - Julie Lopez Company expects the following for...Ch. C - Prob. 11SE Ch. C - Prob. 12SE Ch. C - Prob. 13SE Ch. C - Prob. 14SE Ch. C - Prob. 15SE Ch. C - Prob. 16E Ch. C - Prob. 17E Ch. C - Prob. 18E Ch. C - Prob. 19E Ch. C - Prob. 20E Ch. C - The income statement of Boost Plus, Inc. follows:...Ch. C - Prob. 22E Ch. C - Rouse Exercise Equipment, Inc. reported the...Ch. C - Use the Rouse Exercise Equipment data in Exercise...Ch. C - Prob. 25E Ch. C - Prob. 26E Ch. C - Prob. 27E Ch. C - Prob. 28E Ch. C - Prob. 29E Ch. C - Prob. 30E Ch. C - Prob. 31E Ch. C - American Rare Coins (ARC) was formed on January 1,...Ch. C - Prob. 33AP Ch. C - Prob. 34AP Ch. C - Prob. 35AP Ch. C - Boundary Rare Coins (BRC) was formed on January 1,...Ch. C - Use the Rolling Hills, Inc. data from Problem...Ch. C - Prob. 38AP Ch. C - Classic Rare Coins (CRC) was formed on January 1,...Ch. C - Accountants for Benson, Inc. have assembled the...Ch. C - Prob. 41BP Ch. C - Prob. 42BP Ch. C - Prob. 43BP Ch. C - Use the Sweet Valley data from Problem P14-41B....Ch. C - Prob. 45BP Ch. C - Prob. 47P Ch. C - Before you begin this assignment, review the Tying...Ch. C - Prob. 1DC Ch. C - Prob. 1EI Ch. C - Details about a companys cash flows appear in a...

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Prepare the statement of cash flows under indirect method.

Solution Summary: The author explains how to prepare a statement of cash flows for P Media Corporation for the year ended December 31, 2018.

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