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. 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 Table (2) 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...

15th Edition

ISBN: 9781337587488

Author: WARREN

Publisher: CENGAGE L

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Chapter 16, Problem 13E

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Indicate items to be reported on the statement of cash flows.

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Chapter 16, Problem 12E

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Indicate items to be reported on the statement of cash flows .

Solution Summary: The author explains how the statement of cash flows determines the net changes in cash due to the operating, investing, and financing activities of a company.

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Indicate items to be reported on the statement of cash flows.

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