Financial & Managerial Accounting, Loose-Leaf Version
14th Edition
ISBN: 9781337270700
Author: Carl S. Warren, James M. Reeve, Jonathan Duchac
Publisher: South-Western College Pub
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Question
Chapter 13, Problem 13.3APR
To determine
Statement of
Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.
Cash flows from operating activities: These are the cash produced by the normal business operations.
The below table shows the way of calculation of cash flows from operating activities:
| Cash flows from operating activities (Indirect method) |
| Add: Decrease in current assets |
| Increase in current liability |
| |
| Loss on sale of plant assets |
| Deduct: Increase in current assets |
| Decrease in current liabilities |
| Gain on sale of plant assets |
| Net cash provided from or used by operating activities |
Table (1)
Cash flows from investing activities: Cash provided by or used in investing activities is a section of statement of cash flows. It includes the purchase or sale of equipment or land, or marketable securities, which is used for business operations.
The below table shows the way of calculation of cash flows from investing activities:
| Cash flows from investing activities |
| Add: Proceeds from sale of fixed assets |
| Sale of marketable securities / investments |
| Interest received |
| Dividend received |
| Deduct: Purchase of fixed assets/long-lived assets |
| Purchase of marketable securities |
| Net cash provided from or used by investing activities |
Table (2)
Cash flows from financing activities: Cash provided by or used in financing activities is a section of statement of cash flows. It includes raising cash from long-term debt or payment of long-term debt, which is used for business operations.
The below table shows the way of calculation of cash flows from financing activities:
| Cash flows from financing activities |
| Add: Issuance of common stock |
| Proceeds from borrowings |
| Proceeds from issuance of debt |
| Issuance of bonds payable |
| Deduct: Payment of dividend |
| Repayment of debt |
| Interest paid |
| Redemption of debt |
| Repurchase of stock |
| Net cash provided from or used by financing activities |
Table (3)
To Prepare: A statement of cash flows using the indirect method for presenting cash flows from operating activities.
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Chapter 13 Solutions
Financial & Managerial Accounting, Loose-Leaf Version
Ch. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQCh. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Prob. 13.2BECh. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Prob. 13.7BECh. 13 - Prob. 13.8BECh. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Prob. 13.5EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Prob. 13.14EXCh. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Cash flows from operating activities direct method...Ch. 13 - Prob. 13.22EXCh. 13 - Prob. 13.1APRCh. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows indirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows direct method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 1ADMCh. 13 - Prob. 2ADMCh. 13 - Prob. 3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Prob. 13.1TIFCh. 13 - Prob. 13.3TIF
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