Chapter 16, Problem 16.2BYP

(a)(1)

To determine

Financial Statements: A part of annual report that is attributed to the financials of the company for an accounting period is called financial statements. These include income statement, statement of retained earnings, balance sheet and cash flow statement.

Net Cash Used in Investments: The unfavorable outcome from investing activities portion of cash flow statement is called net cash used in investment or investing activities. It reflects the net amount company has invested during the accounting period.

Capital Expenditure: The amount spent by company for plant and machinery or to acquire other relatively bigger assets is reported as capital expenditure.

To determine: net cash used in investing activities during the current year for Company P and Company C.

(2)

To determine

cash used for capital expenditure during the current year for Company P and Company C.

(b)

To determine

To identify: The subsidiaries that have been consolidated for Company P’s consolidated financial statements.