Explanation 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. 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 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 Table (2) 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 (3) 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...

15th Edition

ISBN: 9781337912020

Author: Carl Warren, Ph.d. Cma William B. Tayler

Publisher: South-Western College Pub

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Chapter 15, Problem 3PA

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Chapter 15 Solutions

Managerial Accounting

Ch. 15 - Prob. 1DQ Ch. 15 - Prob. 2DQ Ch. 15 - Prob. 3DQ Ch. 15 - Prob. 4DQ Ch. 15 - Prob. 5DQ Ch. 15 - Prob. 6DQ Ch. 15 - Prob. 7DQ Ch. 15 - Fully depreciated equipment costing 50,000 was...Ch. 15 - Prob. 9DQ Ch. 15 - Prob. 10DQ

Ch. 15 - Prob. 1BE Ch. 15 - Prob. 2BE Ch. 15 - Prob. 3BE Ch. 15 - Prob. 4BE Ch. 15 - Land transactions on the statement of cash flows...Ch. 15 - Prob. 6BE Ch. 15 - Prob. 7BE Ch. 15 - Prob. 8BE Ch. 15 - Prob. 9BE Ch. 15 - Prob. 1E Ch. 15 - Effect of transactions on cash flows State the...Ch. 15 - Prob. 3E Ch. 15 - Prob. 4E Ch. 15 - Cash flows from operating activitiesindirect...Ch. 15 - Prob. 6E Ch. 15 - Prob. 7E Ch. 15 - Reporting changes in equipment on statement of...Ch. 15 - Reporting changes in equipment on statement of...Ch. 15 - Prob. 10E Ch. 15 - Prob. 11E Ch. 15 - Prob. 12E Ch. 15 - Prob. 13E Ch. 15 - Prob. 14E Ch. 15 - Prob. 15E Ch. 15 - Prob. 16E Ch. 15 - Statement of cash flowsindirect method The...Ch. 15 - Prob. 18E Ch. 15 - Prob. 19E Ch. 15 - Prob. 20E Ch. 15 - Prob. 21E Ch. 15 - Prob. 22E Ch. 15 - Prob. 1PA Ch. 15 - Statement of cash flowsindirect method The...Ch. 15 - Prob. 3PA Ch. 15 - Prob. 4PA Ch. 15 - Statement of cash flowsdirect method applied to PR...Ch. 15 - Prob. 1PB Ch. 15 - Prob. 2PB Ch. 15 - Prob. 3PB Ch. 15 - Statement of cash flowsdirect method The...Ch. 15 - Statement of cash flowsdirect method applied to PR...Ch. 15 - Prob. 1MAD Ch. 15 - Prob. 2MAD Ch. 15 - Prob. 3MAD Ch. 15 - Prob. 4MAD Ch. 15 - Prob. 5MAD Ch. 15 - Prob. 1TIF Ch. 15 - Financial condition Tidewater Inc., a retailer,...Ch. 15 - Prob. 4TIF

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