Prepare a statement of cash flows from changes in balance sheet accounts. The comparitive balance sheet for Incloud Airlines show the following information for a recent year (amt is thousands, US$) Change Amt Direction Cash 40,308* Increase A/R 15,351 Decrease Inventories 15,117 Increase Prepayments 16,776 Increase PPE (at cost) 1,134,644** Increase Accumulated Depreciation 264,088 Increase Other non operating assets 8,711 Increase A/P 660 Decrease Longterm debt 244,285 Increase other non operating liabilities 140,026 Increase Common Stock 96,911 Increase Other current liabilities 114,596 Increase Retained Earnings 340,879 Increase *Cash was 378,511 at beginning of year and 418,819 at end of year. **Incloud did not sell any PPE for the year Net Income was 474,378 Prepare statement of cash flows and treat changes in non-operating assets as investing transactions and changes in non-operating liabilities as financing transactions.
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.
6.26 in Financial Accounting 14th ed.
Prepare a statement of
The comparitive balance sheet for Incloud Airlines show the following information for a recent year (amt is thousands, US$)
| Change | Amt | Direction |
| Cash | 40,308* | Increase |
| A/R | 15,351 |
Decrease |
| Inventories | 15,117 | Increase |
| Prepayments | 16,776 | Increase |
| PPE (at cost) | 1,134,644** | Increase |
| 264,088 | Increase | |
| Other non operating assets | 8,711 | Increase |
| A/P | 660 | Decrease |
| Longterm debt | 244,285 | Increase |
| other non operating liabilities | 140,026 | Increase |
| Common Stock | 96,911 | Increase |
| Other current liabilities | 114,596 | Increase |
| 340,879 | Increase |
*Cash was 378,511 at beginning of year and 418,819 at end of year.
**Incloud did not sell any PPE for the year
Net Income was 474,378
Prepare statement of cash flows and treat changes in non-operating assets as investing transactions and changes in non-operating liabilities as financing transactions.
Cash flow statement is the statement which shows cash inflows and cash outflows of the business for the particular period
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
