Explanation Statement of cash flows: 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. The cash flow from operating activitiesCorporation C for the year ended December 31 is as follows: Corporation C Statement of Cash Flows – Indirect Method For the year ended December 31 Particulars Amount Amount Cash flow from operating activities: Refer to Table (2) Net Income $10,000 Add: Depreciation expenses $16,000 Add: Decrease in inventory $60 Add: Decrease in prepaid rent $20 Add: Decrease in prepaid insurance $20 Add: Increase in utilities payable $100 Add: Increase in salaries and wages payable $200 Less:

5th Edition

ISBN: 9780078025914

Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby

Publisher: McGraw-Hill Education

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Chapter 12, Problem 12.2PB

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To prepare: The cash flow from operating activities section of Company G under indirect method.

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Chapter 12, Problem 12.1PB

Chapter 12, Problem 12.3PB

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describe the steps in the preparation of direct and indirect cash fl ow statements, includinghow cash fl ows can be computed using income statement and balance sheet data;

The statement of cash flows provides a list of all the cash inflows and cash outflows during the reporting period. To make the list more informative, the cash flows are classified according to the nature of the activities that create the cash flows. What are the three primary classifications?

Using the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following needs to be adjusted? a. Equity as reported in the balance sheet b. Long-term assets and liabilities from the balance sheet c. Net income d. Reported revenues and expenses

Chapter 12 Solutions

Fundamentals of Financial Accounting

Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8Q Ch. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q

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