
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 operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.
Under indirect method, the following amounts are to be adjusted from the “net income”to calculate the net cash provided from operating activities.
- Deduct: Increase in current assets.
- Add: Decrease in current assets.
- Deduct: Decrease in current liabilities.
- Add: Increase in current liability.
- Add:
Depreciation expense and amortization expense. - Add: Loss on sale of plant assets.
- Less: Gain on sale of plant assets.
To describe: The necessary to convert accrual basis net income to cash basis net income when preparing statement of cash flows.

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Chapter 12 Solutions
FINANCIAL&MNGRL ACCT (LL)W//WILEYPLUS>C
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