Compute for the following: (Show computations) 1. Net cash flow from operating activities – please indicate if it is "Net Inflow" or "Net Outflow" 2. Net cash flow from investing activities – please indicate if it is “Net Inflow" or "Net Outflow" 3. Net cash flow from financing activities – please indicate if it is “Net Inflow" or "Net Outflow"
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![2. On Jan. 3, 2018, ABC Company showed a cash balance of P320,000 and incurred the
following:
2018 Transactions
Jan. 10
Feb 1
Made additional capital investment, P200,000 worth of computer.
Purchased tables and chairs amounting to P50,000, paid P25000 cash and the
balance on account.
Mar 15
April 31
May 1
balances
Received proceeds from a bank loan amounting to P455,000.
Mr. A withdrew P38,500 cash for personal use.
Received from all account customers P228,000 payment on their account
June 15
Aug 31
Paid 25% of Mar 15 bank loan plus P15,500 interest
Received P420,000 advance payment from DEF Inc. for services to be rendered
in the future.
Sold steel cabinet with a book value of P40,000 for P35,000
Paid P74,000 expenses incurred in rendering consulting services.
Sept 31
Dec 28](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19fe3b18-3307-485c-af7f-567c03454896%2F4c97fb2c-3595-4726-8d3b-1c7941ad1cd9%2Fnr22zg_processed.png&w=3840&q=75)
![Compute for the following: (Show computations)
1. Net cash flow from operating activities – please indicate if it is "Net Inflow" or "Net
Outflow"
2. Net cash flow from investing activities – please indicate if it is "Net Inflow" or "Net
Outflow"
3. Net cash flow from financing activities – please indicate if it is “Net Inflow" or "Net
Outflow"
4. Cash balance at the end of the period](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19fe3b18-3307-485c-af7f-567c03454896%2F4c97fb2c-3595-4726-8d3b-1c7941ad1cd9%2Fii7srd_processed.png&w=3840&q=75)
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