1. 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. Prepare the statement of cash flows of Company ST for the year ended December 31, under direct method. Company ST Statement of Cash Flows (Direct Method) For the year ended December 31 Particulars Amount ($) Amount ($) Cash flows from operating activities: Refer to Table (1) Less: Cash received from customers (2) $76,000 Less: Cash paid for salaries and wages expense (3) ($68,500) Less: Cash paid for operating expenses (Refer Note) ($1,000) Less: Cash paid for income tax expense ($2,000) Net cash flowfrom operating activities $4,500 Cash flows from Investing activities: Purchased equipment for cash ($1,000) Net cash used in investing activities ($1,000) Cash flows from financing activities: Cash proceeds through raising of bank loan $2,000 Net cash flows from financing activities $2,000 Net increase in cash $5,500 Cash balance at the beginning $8,000 Cash balance at the end $13,500 Table (1) Working Note: Determine the changes in current assets and Liabilities... 2. To determine To evaluate: The statement of cash flows of Company ST.

Loose-leaf for Fundamentals of Financial Accounting with Connect

5th Edition

ISBN: 9781259619007

Author: Fred Phillips Associate Professor

Publisher: McGraw-Hill Education

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Chapter 12, Problem 12.6CP

To determine

To prepare: the statement of cash flows of Company ST for the current year ended December 31 using the indirect method.

To determine

To evaluate: The statement of cash flows of Company ST.

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Chapter 12, Problem 12.5CP

Chapter 12, Problem 12.7CP

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IT MUST BE ACCURATE AND COMPLETE EXPLANATION Discuss the computation of Operating Cash Flow using the indirect method. Explain why do we add or deduct items or transactions.

how to prepare a statement of cash flows in the formats required under FSB 1 and IAS 7 respectively.

Can you give some explanation of why Amortization Expense is included as a source of cash in a cash flow statement?

Chapter 12 Solutions

Loose-leaf for Fundamentals of Financial Accounting with Connect

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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