Explanation Prepare the statement of cash flows for the year ended June 30, 2018 (Using direct method). A Services, Incorporation Statement of Cash Flows Year Ended June 30, 2018 Cash flows from operating activities: Cash receipts: Collections from customers 290,000 Dividends received 10,000 Total cash receipts 300,000 Cash payments: To suppliers (119,000) To employees (73,000) For income tax (14,000) For interest (3,000) Total cash payments (209,000) Net cash provided by operating activities 91,000 Cash flows from investing activities: Acquisition of fixed assets (85,000) Proceeds from sale of land 21,000 Net cash used for investing activities (64,000) Cash flows from financing activities: Proceeds from issuance of common stock 34,000 Payment of long-term notes payable (17,000) Payments of dividends (11,000) Net cash provided by financing activities 6,000 Net increase in cash 33,000 Cash balance, June 30, 2017 28,000 Cash balance, June 30, 2018 $61,000 Table (1) Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period. 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. Direct method: The direct method uses the cash basis of accounting for the preparation of the statement of cash flows. It takes into account those revenues and expenses for which cash is either received or paid. The below table shows the way of calculation of cash flows from operating activities using direct method: Cash flows from operating activities (Direct method) Add: Cash receipts. Cash receipt from customer Less: Cash payments: To supplier Interest expense For operating expenses Income tax expenses Net cash provided from or used by operating activities Table (2) Cash flows from investing activities: Cash provided by or used in investing activities is a section of statement of cash flows...

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ISBN: 9780137525423

Author: Robert Kemp, Jeffrey Waybright

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Pearson eText for Financial Accounting -- Instant Access (Pearson+)

Ch. 11 - Prob. 1DQ Ch. 11 - Prob. 2DQ Ch. 11 - Prob. 3DQ Ch. 11 - A company issued bonds during the year. Would this...Ch. 11 - Prob. 5DQ Ch. 11 - When using the indirect method, why are gains on...Ch. 11 - Prob. 7DQ Ch. 11 - Prob. 8DQ Ch. 11 - Prob. 9DQ Ch. 11 - Prob. 10DQ

Ch. 11 - Prob. 1SC Ch. 11 - Operating activities are most closely related to:...Ch. 11 - Prob. 3SC Ch. 11 - Prob. 4SC Ch. 11 - Finlay, Inc., earned net income of 63,000 after...Ch. 11 - Prob. 6SC Ch. 11 - Prob. 7SC Ch. 11 - Prob. 8SC Ch. 11 - Prob. 9SC Ch. 11 - Elliot Enterprises had operating expenses of...Ch. 11 - Prob. 11SC Ch. 11 - Prob. 12SC Ch. 11 - Prob. 1SE Ch. 11 - Prob. 2SE Ch. 11 - Prob. 3SE Ch. 11 - Prob. 4SE Ch. 11 - Prob. 5SE Ch. 11 - Prob. 6SE Ch. 11 - Operating activitiesindirect method (Learning...Ch. 11 - Prob. 8SE Ch. 11 - Operating activitiesdirect method (Learning...Ch. 11 - Prob. 10SE Ch. 11 - Prob. 11SE Ch. 11 - Prob. 12SE Ch. 11 - Prob. 13AE Ch. 11 - Prob. 14AE Ch. 11 - Prob. 15AE Ch. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 17AE Ch. 11 - Prob. 18AE Ch. 11 - Prob. 19AE Ch. 11 - Prob. 20AE Ch. 11 - Prob. 21AE Ch. 11 - Prob. 22BE Ch. 11 - Prob. 23BE Ch. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 25BE Ch. 11 - Prob. 26BE Ch. 11 - Prob. 27BE Ch. 11 - Prob. 28BE Ch. 11 - Prob. 29BE Ch. 11 - Calculating certain information using the direct...Ch. 11 - Prob. 31AP Ch. 11 - Prob. 32AP Ch. 11 - Prob. 33AP Ch. 11 - Prob. 34AP Ch. 11 - Prob. 35AP Ch. 11 - Prob. 36AP Ch. 11 - Prob. 37BP Ch. 11 - Prob. 38BP Ch. 11 - Prob. 39BP Ch. 11 - Prob. 40BP Ch. 11 - Prob. 41BP Ch. 11 - Prob. 42BP Ch. 11 - Prob. 1CE Ch. 11 - Prob. 1CP Ch. 11 - Apply Your Knowledge Ethics In Action Case 1....Ch. 11 - Case 2. Kevin Sailors, the CEO of Candle...Ch. 11 - Financial Analysis Purpose: To help to familiarize...Ch. 11 - Prob. 1IA Ch. 11 - Small Business Analysis Purpose: To help you...Ch. 11 - Written Communication Prepare a paper outlining...Ch. 11 - Comprehensive Problem The Accounting Cycle and...

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