Introduction:
The statement of
To determine:
To find solutions to the business challenges with the help of the statement of cash flows of a company respectively.
Answer to Problem 1DQ
Solution:
The main purpose of the statement of cash flows is to provide information about cash inflows and
Explanation of Solution
The reporting purpose of the statement of cash flows can answerthe following questions as explained below:
1. Net change in cash flows from operating, investing and financing activities- The management keeps a track of the cash flows resulting from the operating, investing and financing activities during the period. This helps to maintain and expand the company’s on-goingbusiness operationsby obtaining required loans, arranging finances for production and inventory management, allocation of funds for marketing and advertising of the product and so on.
2. Capital budgeting decisions- The statement of cash flows helps in planning the repayment of loans, replacement of fixed assets and other similar long-term plans for business expansion. The long-term projects of a company involve investments in capital assets, project financing, and generating cash inflows over the life of such project, which is pre-planned and analyzed by the management using capital budgeting techniques.
Thus, we conclude that the managementfindssolutions to the business challenges with the help of the statement of cash flows of a company respectively.
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Chapter 16 Solutions
WORKING PAPERS F/ FUND ACCOUNTING
- I am searching for the accurate solution to this financial accounting problem with the right approach.arrow_forwardCan you explain the process for solving this financial accounting question accurately?arrow_forwardPlease provide the solution to this financial accounting question using proper accounting principles.arrow_forward
- Please help me solve this general accounting problem with the correct financial process.arrow_forwardPlease provide the correct answer to this financial accounting problem using valid calculations.arrow_forwardI need help finding the accurate solution to this general accounting problem with valid methods.arrow_forward
- Coastal Bistro has the following information for July, when several new employees were added to the waitstaff: Sales revenue $ 143,000 Cost of food serveda 54,000 Employee wages and salariesb 41,000 Manager salariesc 15,800 Building costs (rent, utilities, etc.)d 19,800 a 10 percent of this cost was for food that was not used by the expiration date, and 12 percent was for food that was incorrectly prepared because of errors in orders taken. b 13 percent of this cost was for kitchen staff time spent fixing dishes to replace meals prepared incorrectly because of errors in the original orders taken. c 15 percent of this cost was time taken to address customer complaints about incorrect orders. d 70 percent of the building was used. Required: Using the traditional income statement format, prepare a value income statement.arrow_forwardPlease provide the correct answer to this financial accounting problem using accurate calculations.arrow_forwardMarvelous Manufacturing, Inc. had the highest total cost of $720,000 in August with a production volume of 15,000 units. Its lowest total cost was $550,000 in February with a production volume of 11,000 units. What is the fixed cost per month?arrow_forward
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