Chapter 16, Problem 5PSA

To determine

Cash Flow Statement:

Cash flow statement is a part of financial statement which reflects the cash inflows and outflows during the year. For the preparation of Cash-flow statement, all the activities have been divided among three parts: Operating Activities, Investing Activities and Financing Activities. Operating Activities are main activities of the business and for which the business is meant to be established. Investing activities are activities relating to activities of sale and purchase of fixed assets and long term investment. The Financing Activities are Activities relating to issue and repayment of stock, bonds, long term liabilities and also serving the cost related to such activities.

The Preparation of Cash flow Statement under direct method.