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. Working note: Calculate the amount of cash from issuing bonds payable: Cash from issuing bonds payable= ( Issuance of bonds - Discount on bonds payable ) = ( $ 450 , 000 + $ 30 , 000 ) = $ 420 , 000 Calculate the amount of cash used to redeem bonds payable: Cash used to redeem bonds payable = ( Retire bonds of debit balance - Retire bonds of credit balance ) = ( $ 150 , 000 − $ 12 , 000 ) = $ 138 , 000 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

14th Edition

ISBN: 9781305088436

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 16, Problem 14E

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

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Chapter 16, Problem 13E

Chapter 16, Problem 15E

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Chapter 16 Solutions

Financial Accounting

Ch. 16 - Prob. 1DQ Ch. 16 - Prob. 2DQ Ch. 16 - A corporation issued 2,000,000 of common stock in...Ch. 16 - A retail business, using the accrual method of...Ch. 16 - If salaries payable was 100,000 at the beginning...Ch. 16 - Prob. 6DQ Ch. 16 - A corporation issued 2,000,000 of 20-year bonds...Ch. 16 - Fully depreciated equipment costing 50,000 is...Ch. 16 - Prob. 9DQ Ch. 16 - Prob. 10DQ

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Indicate the 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.

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

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Chapter 16 Solutions