Statement of cash flows : The statement of cash flow is a financial statement, which provides a summary of actual or anticipated cash inflow and cash outflow in a firm over an accounting period. It determines the net changes in cash through reporting the sources and uses of cash due to operating, investing, and financial activities of a company. The cash flow statement is categorized into three parts as follows: ► Cash flow from operating activities: All those activities that are related to production, sales, and delivery of an organization’s product or service and collection of payments from customers come under this category. For example: Losses, gains, purchase of raw material, inventory, depreciation , and advertising. ► Cash flow from investing activities: When an organization purchases or sells any asset, then whatever cash comes in or goes out are reported under this head of the cash flow statement. If any loan is made to a supplier or received from a customer then, it would be reported in it and if a merger or acquisition exists there, then all the payments related to it would also be recorded in it. ► Cash flow from financing activities: The inflow of cash from investors like bank and shareholders and outflow to shareholders in the form of dividends is recorded under this head of the cash flow statement. All those activities that affect the long-term liabilities or equity of the organization will also be reported under this head. To prepare: The operating activities section of its statement of cash flows for the year ended December 31, 2015.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 6E

To determine

Statement of cash flows:

The statement of cash flow is a financial statement, which provides a summary of actual or anticipated cash inflow and cash outflow in a firm over an accounting period. It determines the net changes in cash through reporting the sources and uses of cash due to operating, investing, and financial activities of a company.

The cash flow statement is categorized into three parts as follows:

► Cash flow from operating activities: All those activities that are related to production, sales, and delivery of an organization’s product or service and collection of payments from customers come under this category. For example: Losses, gains, purchase of raw material, inventory, depreciation, and advertising.

► Cash flow from investing activities: When an organization purchases or sells any asset, then whatever cash comes in or goes out are reported under this head of the cash flow statement. If any loan is made to a supplier or received from a customer then, it would be reported in it and if a merger or acquisition exists there, then all the payments related to it would also be recorded in it.

► Cash flow from financing activities: The inflow of cash from investors like bank and shareholders and outflow to shareholders in the form of dividends is recorded under this head of the cash flow statement. All those activities that affect the long-term liabilities or equity of the organization will also be reported under this head.

To prepare: The operating activities section of its statement of cash flows for the year ended December 31, 2015.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Assume that TDW Corporation (calendar-year-end) has 2024 taxable income of $952,000 for purposes of computing the §179 expense. The company acquired the following assets during 2024: (Use MACRS Table 1, Table 2, Table 3, Table 4, and Table 5.) Asset Machinery Computer equipment Furniture Total Placed in Service September 12 February 10 April 2 Basis $ 2,270,250 263,325 880,425 $ 3,414,000 b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2024 on the assets it placed in service in 2024, assuming no bonus depreciation? Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. Maximum total depreciation deduction (including §179 expense)

Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. b. What is the allowable depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation and elects out of §179 expense?

Lina purchased a new car for use in her business during 2024. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2024 and 2025 (Lina doesn't want to take bonus depreciation for 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) a. The vehicle cost $40,000, and business use is 100 percent (ignore §179 expense). Year Depreciation deduction 2024 2025