Chapter 12, Problem 6BTN

To determine

Cash Flow Statement:

Cash flow statement gives the information related to the cash inflow and outflow of the company. It gives the information cash inflow and out flow from the operating, investing and financing activities.

1.

a.

To explain: Object of the cash flow statement.

b.

To determine

To explain: Similarity and difference between the direct and indirect method.

c.

To determine

To explain: Steps followed in the cash flow statement.

d.

To determine

To explain: Type of the information given by the cash flow statement.

To determine

To explain: Adjustment of the noncash operating revenue and expense in cash flow statement.

b.

To determine

To explain: Adjustment of the noncash operating gain and loss.

c.

To determine

To explain: Increase and decrease in noncash current assets.

If the noncash current assets are increase then it is added and if the noncash assets decrease then it is added in the cash flow statement.

d.

To explain: Increase and decrease in noncash current assets.

If the noncash current liability is increase then it is deducted and if the noncash liability decreases then it is added in the cash flow statement.

3.

a.

To explain: Formula for cash collected from customer.

b.

To determine

To explain: Formula for cash paid for inventory to supplier.

c.

To determine

To explain: Formula for cash paid for wages and operating expense.

d.

To determine

To explain: Formula for cash paid for interest and taxes.