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2 cashflows statement

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  • 1. Statement of Cash Flows By Dr. B. Krishna Reddy Professor and Head_SKIM
  • 2. The Statement of Cash Flows 14– 2 … shows how a company’s operating, investing, and financing activities affected cash during an accounting period Explains the net increase (or decrease) in cash during the accounting period
  • 3. Cash and Cash Equivalents 14– 3 Cash includes cash and cash equivalents  Cash  Money on hand  Deposits in company checking accounts  Cash equivalents  Short-term, highly liquid investments including  Money market accounts  Commercial paper  U.S. Treasury bills  Combined with the Cash account on the statement of cash flows
  • 4. Purposes of the Statement of Cash Flows 14– 4 … is to provide information about a company’s cash receipts and cash payments during an accounting period Other financial statements may also provide some of this information
  • 5. Internal Uses of the Statement of Cash Flows 14– 5 Management uses the statement of cash flows to  Assess liquidity  Determine if short-term financing is necessary  Determine dividend policy  Decide whether to raise or lower dividends  Evaluate the effects of investment and financing decisions  Plan for investing and financing needs
  • 6. External Uses of the Statement of Cash Flows 14– 6 Investors and creditors use the statement of cash flows to assess a company’s ability to  Manage cash flows  Generate positive future cash flows  Pay its liabilities  Pay dividends and interest  Anticipate its need for additional financing
  • 7. Classification of Cash Flows Copyright © Houghton Mifflin Company. All rights reserved. 14– 7  The statement of cash flows classifies cash receipts and cash payments into categories 1. Operating activities 2. Investing activities 3. Financing activities
  • 8. Operating Activities 14– 8 … include the cash effects of transactions and other events that affect the income statement In effect, items on the income statement are changed from an accrual to a cash basis
  • 9. Operating Activities 14– 9 Cash inflows  Cash receipts from customers for goods and services  Interest and dividends received on loans and investments  Sales of trading securities Cash outflows  Cash payments for  Wages  Goods and services  Expenses  Interest  Taxes  Purchases of trading securities
  • 10. Investing Activities 14– 10 … include the cash effects of transactions that affect long-term assets Acquiring and selling long-term assets Acquiring and selling marketable securities other than trading securities or cash equivalents Making and collecting loans
  • 11. Investing Activities 14– 11 Cash inflows  Cash receipts from selling long-term assets and marketable securities  Collecting loans Cash outflows  Cash expended for purchases of long-term assets and marketable securities  Cash loaned to borrowers
  • 12. Financing Activities 14– 12 … include the cash effects of transactions that affect long-term liabilities and stockholders’ equity Obtaining resources from stockholders Returning resources to stockholders and providing them with a return on their investment Obtaining resources from creditors Repaying amounts borrowed from creditors or otherwise settling obligations  Repayments of accounts payable or accrued liabilities are classified under operating activities
  • 13. Financing Activities 14– 13 Cash inflows  Proceeds from issues of stock  Proceeds from short-term and long-term borrowing Cash outflows  Repayment of loans  Payments to owners (cash dividends)  Treasury stock transactions
  • 14. Classification of Cash Inflows and Cash Outflows
  • 15. Noncash Investing and Financing Transactions Copyright © Houghton Mifflin Company. All rights reserved. 14– 15 Involve only long-term assets long-term liabilities stockholders’ equity in significant investing and financing activities Not reflected on the statement of cash flows because they do not involve either cash inflows or cash outflows Disclosed in a separate schedule as part of the statement of cash flows
  • 16. Format of the Statement of Cash Flows Divided into three sections  Cash flows from operating activities  Cash flows from investing activities  Cash flows from financing activities A reconciliation of beginning and ending Cash balances appears near the bottom of the statement Schedule of noncash investing and financing transactions
  • 17. Cash-Generating Efficiency (CGE) Copyright © Houghton Mifflin Company. All rights reserved. 14– 17 …shows the company’s ability to generate cash from its current or continuing operations There are three measures of CGE 1. Cash Flow Yield Shows how much of net income actually results in operating cash inflows IncomeNet ActivitiesOperatingfromFlowsCashNet YieldFlowCash = times1.8 $479 $850 ==
  • 18. Cash-Generating Efficiency (CGE) (cont’d) 14– 18 2. Cash Flows to Sales 3. Cash Flows to Assets Shows how much of net sales actually results in cash inflows Shows how much cash is being generated by operations for each dollar of assets SalesNet ActivitiesOperatingfromFlowsCashNet SalestoFlowsCash = 8.5% $10,017 $850 == AssetsTotalAverage ActivitiesOperatingfromFlowsCashNet AssetstoFlowsCash = 10.9% 2$7,324)($8,239 $850 = ÷+ =
  • 19. Free Cash Flow (FCF) 14– 19 … is the amount of cash that remains after paying for continuing operations at the current level, interest, income taxes, dividends, and net capital expenditures Shows how much cash a company has available to reduce debt or expand Free Cash Flow = Net Cash Flows from Operating Activities – Dividends – Purchases of Plant Assets + Sales of Plant Assets
  • 20. Free Cash Flow (cont’d) Copyright © Houghton Mifflin Company. All rights reserved. 14– 20 If free cash flow is positive, the company  Has met all of its planned cash commitments  Has cash available to reduce debt or expand If free cash flow is negative, the company will have to  Sell investments  Borrow money  Issue stock in the short term to continue at its planned level of operation
  • 21. Determining Cash Flows from Operating Activities14– 21  There are two methods of converting the income statement from an accrual basis to a cash basis 1. The direct method  Adjusts each item in the income statement to its cash equivalent  More easily understood by the average reader 1. The indirect method  Lists only necessary adjustments to convert net income to net cash flows  Superior from an analyst’s perspective  Used by most companies  Both methods produce the same net figure
  • 22. Indirect Method of Determining Net Cash Flows from Operating Activities14– 22
  • 23. Depreciation 14– 23 Depreciation, amortization, and depletion expense are allocations of expense and do not involve cash flows An adjustment is needed to increase net income by the amount recorded
  • 24. Adjustments to Depreciation 14– 24 Effect on income statement: -$37,000 Effect on cash flows: zero Cash flow out is $37,000 less, because depreciation expense has no cash effect Add $37,000 to net income Depreciation Expense Income Taxes Payable Cash 37,000 37,000 Depreciation expense $37,000
  • 25. Adjustments to Depreciation 14– 25 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Depreciation expense $37,000 Depreciation Expense Accumulated Depreciation Cash 37,000 37,000
  • 26. Gains and Losses Copyright © Houghton Mifflin Company. All rights reserved. 14– 26 Gains and losses do not affect cash flows from operating activities and need to be removed from this section The cash receipts that resulted in the gains or losses are shown with investing activities
  • 27. Adjustments to Gains and Losses 14– 27 Gain on sale of investments $12,000 Investments sold for $102,000 (original cost $90,000) Effect on income statement: +$12,000 Effect on cash flows: +$102,000 (Shown under investing activities) Gains do not affect cash flows from operating activities and need to be removed from this section Deduct $12,000 from net income Gain on Sale - Investments Investments Cash 90,000 -0- 90,000 12,000 102,000
  • 28. Adjustments to Gains and Losses 14– 28 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Gain on sale of investments $12,000 Investments sold for $102,000 (original cost $90,000) Gain on Sale - Investments Investments Cash 90,000 -0- 90,000 12,000 102,000
  • 29. Adjustments to Gains and Losses Copyright © Houghton Mifflin Company. All rights reserved. 14– 29 Loss on sale of plant assets $3,000 Plant assets (original cost $10,000) sold for $5,000 Effect on income statement: -$3,000 Effect on cash flows: +$5,000 (Shown under investing activities) Losses do not affect cash flows from operating activities and need to be removed from this section Add $3,000 to net income Loss on Sale of Plant Assets 10,000 -0- 10,000 3,000 2,000 Accum. Dep. Plant AssetsPlant Assets Cash -0- 2,000 5,000
  • 30. Adjustments to Gains and Losses Copyright © Houghton Mifflin Company. All rights reserved. 14– 30 Loss on sale of plant assets $3,000 Plant assets (original cost $10,000) sold for $5,000 Loss on Sale of Plant Assets 10,000 -0- 10,000 3,000 2,000 Accum. Dep. Plant AssetsPlant Assets Cash -0- 2,000 5,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000
  • 31. Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 31 Decreases are added to net income Increases are deducted from net income
  • 32. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 32 – Add $8,000 to net income because cash received from sales was $8,000 more than sales ($706,000 - $698,000) Cash Receipts from CustomersSales to Customers Accounts Receivable Beg. Bal. 55,000 End. Bal. 47,000 706,000 698,000 • Example – Accounts Receivable balance decreased by $8,000 ($47,000 - $55,000)
  • 33. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 33 Sales 698,000 Beginning Accounts Receivable $ 55,000 Ending Accounts Receivable 47,000 Effect on income statement: +$698,000 Effect on cash flows: +$706,000 Cash flow in is $8,000 more than Sales because Accounts Receivable decreased $8,000 Add $8,000 to net income Sales Accounts Receivable Cash 706,000 47,000 55,000 698,000 706,000 698,000
  • 34. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 34 Beginning Accounts Receivable $ 55,000 Ending Accounts Receivable 47,000 Sales 698,000 Sales Accounts Receivable Cash 706,000 47,000 55,000 698,000 706,000 698,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000
  • 35. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 35 Inventory Cash 144,000 110,000 Beginning Inventory $110,000 Ending Inventory 144,000 34,000 34,000 Effect on income statement: None Effect on cash flows: -$34,000 Cash flow out is $34,000 more because the Inventory account increased Deduct 34,000 from net income
  • 36. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 36 Inventory Cash 144,000 110,000 Beginning Inventory $110,000 Ending Inventory 144,000 34,000 34,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000)
  • 37. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 37 Beginning Prepaid Expenses $5,000 Ending Prepaid Expenses 1,000 Insurance expense 6,000 Effect on income statement: -$6,000 Effect on cash flows: -$2,000 Cash flow out is $4,000 less than expenses because Prepaid Expenses decreased $4,000 Add $4,000 to net income Insurance Expense Prepaid Expenses Cash 2,000 1,000 5,000 6,000 2,000 6,000
  • 38. Adjustments to Changes in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 38 Beginning Prepaid Expenses $5,000 Ending Prepaid Expenses 1,000 Insurance expense 6,000 Insurance Expense Prepaid Expenses Cash 2,000 1,000 5,000 6,000 2,000 6,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000) Decrease in prepaid expenses 4,000
  • 39. Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 39 Increases are added to net income Decreases are deducted from net income
  • 40. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 40 – Add $7,000 to net income because cash paid for purchases was $7,000 less than what appears on the income statement ($554,000 - $547,000) Purchases Cash Paid to Suppliers Accounts Payable Beg. Bal. 43,000 End. Bal. 50,000 554,000 547,000 • Example – Accounts Payable balance increased by $7,000 ($50,000 - $43,000)
  • 41. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 41 Cost of Goods Sold 520,000 Accounts Payable Cash 50,000 43,000 513,000 513,000 Effect on income statement: -$520,000 Effect on cash flows: -$513,000 Cash flow out is $7,000 less because Accounts Payable decreased Add $7,000 to net income Beginning Accounts Payable $43,000 Ending Accounts Payable 50,000 Cost of Goods Sold 520,000 520,000
  • 42. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 42 Beginning Accounts Payable $43,000 Ending Accounts Payable 50,000 Cost of Goods Sold 520,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000) Decrease in prepaid expenses 4,000 Increase in accounts payable 7,000 Accounts Payable Cash 50,000 43,000 513,000 513,000 Cost of Goods Sold 520,000 520,000
  • 43. Relationship of Inventory and Accounts Payable Accounts Copyright © Houghton Mifflin Company. All rights reserved. 14– 43 Beginning Inventory $110,000 Ending Inventory 144,000 Beginning Accounts Payable $43,000 Ending Accounts Payable 50,000 Cost of goods sold 520,000 Effect on income statement: -$520,000 Effect on cash flows: -$547,000 Cash flow out is $27,000 more than expenses (-$34,000 + $7,000) $34,000 deducted from net income for increase in Inventory($144,000 - $110,000) $7,000 added to net income for increase in Accounts Payable ($50,000 - $43,000) Cost of Goods Sold 520,000 144,000 110,000 520,000 554,000 Accounts PayableInventory Cash 50,000 43,000 547,000 Purchases 554,000 554,000 547,000
  • 44. Relationship of Inventory and Accounts Payable Accounts Copyright © Houghton Mifflin Company. All rights reserved. 14– 44 Beginning Inventory $110,000 Ending Inventory 144,000 Beginning Accounts Payable $43,000 Ending Accounts Payable 50,000 Cost of goods sold 520,000 Cost of Goods Sold 520,000 144,000 110,000 520,000 554,000 Accounts PayableInventory Cash 50,000 43,000 647,000 Purchases 554,000 554,000 647,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000) Decrease in prepaid expenses 4,000 Increase in accounts payable 7,000
  • 45. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 45 Accrued Expenses Accrued Liabilities 12,000 9,000 Beginning Accrued Liabilities $ 9,000 Ending Accrued Liabilities 12,000 3,000 3,000 Effect on income statement: -$3,000 Effect on cash flows: None Cash flow out is $3,000 less than expenses Add $3,000 to net income
  • 46. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 46 Accrued Expenses Accrued Liabilities 12,000 9,000 Beginning Accrued Liabilities $ 9,000 Ending Accrued Liabilities 12,000 3,000 3,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000) Decrease in prepaid expenses 4,000 Increase in accounts payable 7,000 Increase in accrued liabilities 3,000
  • 47. Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 47 Income Taxes Payable Cash 3,000 5,000 Beginning Income Taxes Payable $5,000 Ending Income Taxes Payable 3,000 2,000 2,000 Effect on income statement: None Effect on cash flows: -$2,000 Cash flow out is $2,000 more because Income Taxes Payable decreased Deduct $2,000 from Net Income
  • 48. Adjustments to Changes in Current Liabilities Copyright © Houghton Mifflin Company. All rights reserved. 14– 48 Income Taxes Payable Cash 3,000 5,000 Cash Flows from Operating Activities Net income $16,000 Depreciation expense $37,000 Gain on sale of investments (12,000) Loss on sale of plant assets 3,000 Decrease in accounts receivable 8,000 Increase in inventory (34,000) Decrease in prepaid expenses 4,000 Increase in accounts payable 7,000 Increase in accrued liabilities 3,000 Decrease in income taxes payable (2,000) Beginning Income Taxes Payable $5,000 Ending Income Taxes Payable 3,000 2,000 2,000
  • 49. Schedule of Cash Flows from Operating Activities: Indirect Method
  • 50. Effects of Items on the Income Statement That Do Not Affect Cash Flows Copyright © Houghton Mifflin Company. All rights reserved. 14– 50 Add to or Deduct from Net Income Depreciation expense Add Amortization expense Add Depletion expense Add Losses Add Gains Deduct
  • 51. Adjustments for Increases and Decreases in Current Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 51 Add to Net Income Deduct from Net Income Current assets Accounts receivable (net) Decrease Increase Inventory Decrease Increase Prepaid expenses Decrease Increase Current liabilities Accounts payable Increase Decrease Accrued liabilities Increase Decrease Income taxes payable Increase Decrease
  • 52. Preparing the Statement of Cash Flows: Investing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 52 Objective 4  Determine cash flows from investing activities
  • 53. Cash Flows from Investing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 53 Analyze increases and decreases in the Investments account to determine effects on Cash account Objective  Explain the change in each account balance from one year to the next Focus  Long-term assets (balance sheet)  Short-term investments (current asset section of the balance sheet)  Investment gains and losses (income statement)
  • 54. Accounting for Investments Copyright © Houghton Mifflin Company. All rights reserved. 14– 54 Sale of investments (which cost $90,000) 102,000 Purchase of investments 78,000 Beginning Investments $127,000 Ending Investments 115,000 Effects on cash flows: Purchase of investment –$78,000 Sale of investment +$102,000 Gain on Sale - Investments Investments Cash 78,000 115,000 127,000 90,000 102,000 78,000 12,000 Cash Flows from Investing Activities Purchase of investments ($78,000) Sale of investments 102,000
  • 55. Plant Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 55 Explain changes in both the asset and related accumulated depreciation accounts  Purchases increase plant assets  Sales decrease plant assets Accumulated depreciation is  Increased by the amount of depreciation expense  Decreased by the removal of accumulated depreciation associated with plant assets that are sold
  • 56. Accounting for Plant Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 56 Sale of plant assets 5,000 Purchase of plant assets 120,000 Effects on cash flows: Purchase of plant assets –$120,000 Sale of plant assets +$5,000 Loss on Sale Plant Assets 120,000 715,000 505,000 120,000 10,000 Accum. Dep. Plant AssetsPlant Assets Cash 103,000 68,000 2,000 5,000 Beginning Plant Assets $505,000 Ending Plant Assets 715,000 8,000 Cash Flows from Investing Activities Purchase of investments ($78,000) Sale of investments 102,000 Purchase of plant assets (120,000) Sale of plant assets 5,000 37,000
  • 57. Accounting for Plant Assets Copyright © Houghton Mifflin Company. All rights reserved. 14– 57 Beginning Plant Assets $505,000 Ending Plant Assets 715,000 Purchase of plant assets 120,000 Sale of plant assets 5,000 Loss on Sale Plant Assets 120,000 505,000 120,000 10,000 Accum. Dep. Plant AssetsPlant Assets Cash 68,000 2,000 5,000 ??? 8,000 All items affecting the Plant Assets account have not been accounted for 715,000 103,000 37,000
  • 58. Accounting for Noncash Investing and Financing Transactions Copyright © Houghton Mifflin Company. All rights reserved. 14– 58 ???100,000 Issue of bonds in exchange for plant assets $100,000 715,000 505,000 120,000 10,000 Cash 100,000 Effects on cash flows: None Schedule of Noncash Investing and Financing Activities Issue of Bonds Payable for Plant Assets $100,000 Bonds PayablePlant Assets
  • 59. Accounting for Cash Flows from Investing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 59 Cash Flows from Investing Activities Purchase of investments ($78,000) Sale of investments 102,000 Purchase of Plant Assets (120,000) Sale of Plant Assets 5,000 Net cash flows from investing activities (91,000)
  • 60. Accounting for Noncash Investing and Financing Transactions Copyright © Houghton Mifflin Company. All rights reserved. 14– 60 Schedule of Noncash Investing and Financing Activities Issue of bonds payable for plant assets $100,000
  • 61. Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 61 Analysis similar to investing activities, including treatment of related gains or losses Focus  Short-term borrowings  Long-term liabilities  Stockholders’ equity accounts Cash dividends from the statement of stockholders’ equity must also be considered
  • 62. Accounting for Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 62 Effects on cash flows: Repayment of bonds -$50,000 Beginning Bonds Payable $245,000 Ending Bonds Payable 295,000 Issue of bonds payable for plant assets 100,000 Repayment of bonds at face value maturity 50,000 Income Taxes Payable Cash 295,000 245,000 50,000 50,000 Cash Flows from Financing Activities Repayment of bonds ($50,000) 100,000
  • 63. Accounting for Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 63 Effects on cash flows: Issue of common stock +$175,000 Beginning Paid-in Capital in Excess of Par, Common 115,000 Ending Paid-in Capital in Excess of Par, Common 189,000 Beginning Common Stock $200,000 Ending Common Stock 276,000 Issue of common stock 175,000 Common Stock Paid-in Capital - Common Cash 189,000 115,000 99,000 175,00076,000 295,000 245,000 Cash Flows from Financing Activities Repayment of bonds ($50,000) Issue of common stock 175,000
  • 64. Accounting for Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 64 Effects on cash flows: Paid dividends -$8,000 Dividends paid 8,000 Beginning Retained Earnings $132,000 Ending Retained Earnings 140,000 Net income 16,000 Income Summary Retained Earnings Cash 8,000 140,000 132,000 16,000 8,000 16,000 Cash Flows from Financing Activities Repayment of bonds ($50,000) Issue of common stock 175,000 Dividends paid (8,000)
  • 65. Accounting for Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 65 Treasury Stock Cash Purchase of treasury stock 25,000 25,000 25,000 Effects on cash flows: Purchase of treasury stock -$25,000 Cash Flows from Financing Activities Repayment of bonds ($50,000) Issue of common stock 175,000 Dividends paid (8,000) Purchase of treasury stock (25,000)
  • 66. Accounting for Cash Flows from Financing Activities Copyright © Houghton Mifflin Company. All rights reserved. 14– 66 Cash Flows from Financing Activities Repayment of bonds ($50,000) Issue of common stock 175,000 Payment of dividends (8,000) Purchase of treasury stock (25,000) Net cash flows from financing activities $92,000
  • 67. Statement of Cash Flows: Indirect Method
  • 68. Discussion Copyright © Houghton Mifflin Company. All rights reserved. 14– 68 Q. Using the indirect method to prepare the statement of cash flows, tell whether each of the following items would appear a) As cash flows from operating activities b) As cash flows from investing activities c) As cash flows from financing activities d) In the schedule of noncash investing and financing transactions e) Not at all
  • 69. Discussion (cont’d) Copyright © Houghton Mifflin Company. All rights reserved. 14– 69 a) As cash flows from operating activities b) As cash flows from investing activities c) As cash flows from financing activities d) In the schedule of noncash investing and financing transactions e) Not at all 1. Dividends paid 2. Cash receipts from sales 3. Decrease in accounts receivable 4. Sale of plant assets 5. Gain on sale of investment 6. Issue of stock for plant assets 7. Issue of common stock 8. Net income 1. c 2. e 3. a 4. b 5. a 6. d 7. c 8. a