Statement of cash flows : It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company. Cash flows from operating activities: Cash flows from operating activity represent the net cash flows from the general operation of the business by comparing the cash receipt and cash payments. 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 Depreciation expense and amortization expense 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 To Compute: Cash flows from operating activities under indirect method.

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Chapter 14, Problem 14.5SE

To determine

Statement of cash flows: It is one of the financial statement that shows the cash and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

Cash flows from operating activities: Cash flows from operating activity represent the net cash flows from the general operation of the business by comparing the cash receipt and cash payments.

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
         Depreciation expense and amortization expense
         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

To Compute: Cash flows from operating activities under indirect method.

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Statement of Cash Flows Problem On the basis of the following data for Breach Co. for the year ended December 31, 2016 and the preceding year, prepare the attached statement of cash flows using the indirect method of reporting cash flows from operating activities. Fill in the blanks and boxes in the accompanying Excel Sheet with the missing information. A worksheet is attached below for your use. Assume that equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period. Stock was issued for cash - 3,200 shares at $10 par. Net income for 2016 was $76,000. Cash dividends declared and paid were $13,000. YearYear20162015Cash170,000$ 74,000Accounts receivable (net)78,00085,000Inventories106,50090,000Equipment395,000370,000Accumulated depreciation(195,000)(158,000)554,500$ 461,000$ Accounts payable (merchandise creditors)51,000$ 50,000$ Taxes payable2,5005,000Common stock, $10 par262,000230,000Retained earnings239,000176,000Totals554,500$ 461,000

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