Chapter 12, Problem 1BTN

To determine

Cash Flow Statement:

Cash flow statement is that statement in which, transaction related to cash are recorded. It is mandatory report and included in the financial statement of the company. It is divided into three parts operating activities, investing activity, and financial activity

Operating Activity:

Operating activity is the first part of the cash flow statement. The main focuses of the operating activity on the cash inflow and outflow from the selling goods, providing services and manufacturing. Long term capital and investing cost are not included in the operating activity.

Financial Activity:

Financial activity is the part of the cash flow statement. Financial activity involves the long term liability, borrowing and stockholder’s equity. All the changes in the long term liability, equity and borrowings reported in the financial statement.

Investing Activity:

Investing activity is the third part of the cash flow statement which gives the information related to the acquisition and disposal of the long term assets of the company such as land and building, investment and plant.

1.

To identify: Method used in making the cash flow statement.

2.

To determine

To identify: Whether the cash paid as dividend is more or less than cash from operating activities.

3.

To determine

To identify: Largest amount difference between net income and operating activities.

4.

To determine

To identify: Largest cash inflow and outflow in financing and investing activities,

5.

To determine

To identify: Largest cash inflow and outflow in the investing and financing activities.