Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow. Determine the operating cash flows and total cash flows of Weaver Company during the year.

Question

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Answer 1

Question

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

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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

Answer 2

Question

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

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Answer 3

Question

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

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Answer 4

Question

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

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Answer 5

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

Answer 6

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.

Conclusion

The operating cash flow and the total cash flows are thus explained.

Answer 7

Chapter 14, Problem 7P

To determine

Cash Flow: In a specific period of time the amount of cash disbursed or received in a particular activity is called cash flow.

Determine the operating cash flows and total cash flows of Weaver Company during the year.

Answer 8

Expert Solution & Answer

Answer to Problem 7P

Solution: The operating cash flows show a net increase of $61 and the total cash flows show a net increase of $9.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

The operating cash flow and the total cash flows are calculated as below-

Particulars	Amount ($)
CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before tax	63
Adjustment for Non-cash items / items
Loss on sale land	4
Gain on sale of investments	(7)
Operating Profit before change in working capital	60
Cash flow from operations before working capital changes
Increase / (Decrease) in Current Liabilities and Current Assets:
Accounts payable	80
Accumulated depreciation	8
Accrued Liabilities	(12)
Income Taxes Payable	6
Inventory	50
Prepaid Expenses	(4)
Accounts receivable	(100)
Cash flow from operations after working capital changes	88
Income Taxes paid	(27)
Net Cash Flow from Operating Activities	61
CASH FLOW FROM INVESTING ACTIVITIES
Property Plant and Equipment	(140)
Sale of Equipment	20
Sale of Long term investments	10
Net Cash Flow from Investing Activities	(110)
CASH FLOW FROM FINANCING ACTIVITIES
Bonds payable	110
Common Stock	-
Repurchase of own stock	(40)
Dividend paid	(27)
Net Cash Flow from Financing Activities	43
Net Increase/ (Decrease) in Cash and Cash Equivalents	(6)
Opening Cash & Cash Equivalents	15
Closing Cash & Cash Equivalents	9

Steps to calculate the operating cash flow:

The non −cash items like depreciation charged to Profit and loss statement (and not the accumulated depreciation), provisions for bad debts are first added to the net income earned by the entity which gives the operating profit before it changes in working capital.
The operating profit is then adjusted according to the changes in the working capital that is increase/decrease in current assets and current liabilities of the business. This gives the cash flow from operating activities after the working capital changes.
Direct taxes actually paid (and not just provided for) are then deducted from the cash flow from operations after working capital changes and this gives the net cash flow from operating activities.

Steps to calculate the investing cash flow:

Investing Cash Flow is one where there is a change in the capital structure of the company. These are usually made in the events of amalgamations, reconstructions, demergers and related events where the whole capital structure of the company is restructured. Hence, purchase of common stock or the purchase of an asset which are all long term investments made with the purpose of reaping long term benefits are termed as investing cash flows.

The purchase of property, plant, equipment, land or any other tangible fixed asset is deducted from the total cash flows.
The sale of property, plant, equipment, land or any other tangible fixed asset or investment or an asset held for reaping long term benefits is added to the total cash flows.

Steps to calculate financing cash flow:

Financial cash flows, as the name suggests, relate to the financial inflow and outflow of business. Repayment of debt, payment of interest and dividends are thus classified as financial cash flows.

It mainly relates to the inflow and outflow of the funds of the business and payment to the investors of long term capital in the company.

The addition to the capital base of the company like purchase or buy-back of common stock, new loan taken, debt borrowed are added to the total cash flows.
The repayment of debt or loan, sale of common stock, reduction in equity are deducted from the total cash flows.
Financial interest or dividend paid are also considered as financing activities and are thus deducted from the total cash flows when paid by the company.