Complete a 2-part assignment in which you classify cash inflows and outflows and prepare a cash flow statement. The balance sheet and income statement do not necessarily show a complete picture of the financial condition of an organization. In most organizations cash is king, and without a sizable amount of cash, an organization can become insolvent (that is, not having enough ready cash to meet its current obligations or purchase merchandise or materials). When this happens, creditors, bankers, and other external stakeholders (people and organizations that have a vested interest in the survival of a business) might become impatient and force the business into bankruptcy. By successfully completing this assignment , you will demonstrate your proficiency in the following course competencies and assessment criteria: Competency 1: Define accounting and its application to accounting principles. Analyze accounting data to classify cash inflow and outflows. Competency 2: Apply accounting cycle strategies to manage business financial events. Apply the appropriate activity for each business transaction. Competency 3: Prepare financial statements from accounting system data. Prepare a cash flow statement using appropriate financial data. This assignment includes two parts. Complete both parts using the templates provided. Both templates are linked in the Resources under the Required Resources heading. Submit both completed templates for the assignment . Part 1: Types of Cash Inflows and Outflows You know that the cash flow statement classifies cash receipts and cash payments as operating, investing, and financing activities. Before preparing the cash flow statement, accounting data must be analyzed to locate transactions in both the cash account and other locations. After the transactions have been located, it should be determined whether each one affects operating, investing, or financing cash flow. Last, whether the transaction results in a cash inflow or outflow must be ascertained. Accountants consider this statement to be foundational for a business to continuously operate. For this part of the assessment, use the Assessment 3, Part 1 Template to classify each of the following cash inflows and outflows as operating, investing, or financing activities: Sale of a piece of company equipment. Sale of common stock. Payment to suppliers for merchandise purchased. Payment to lenders for interest on note payable. Sale of investments in other companies. Purchase of land to expand plant size. Payment to stockholders as cash dividends. Sale of goods or services. Payment to employees for wages and salaries. Lending of money to other business entities. Payment to government for property and income taxes. Collection of principal on loans to other entities. Interest and dividends received. Issue of bonds to support company growth. Purchase of investments in debt or equity of other entities. Payment to other ...

1. Complete a 2-part assignment in which you classify cash
inflows and outflows and prepare a cash flow statement.
The balance sheet and income statement do not necessarily
show a complete picture of the financial condition of an
organization. In most organizations cash is king, and without a
sizable amount of cash, an organization can become insolvent
(that is, not having enough ready cash to meet its current
obligations or purchase merchandise or materials). When this
happens, creditors, bankers, and other external stakeholders
(people and organizations that have a vested interest in the
survival of a business) might become impatient and force the
business into bankruptcy.
By successfully completing this assignment , you will
demonstrate your proficiency in the following course
competencies and assessment criteria:
Competency 1: Define accounting and its application to
accounting principles.
Analyze accounting data to classify cash inflow and outflows.
Competency 2: Apply accounting cycle strategies to manage
business financial events.
Apply the appropriate activity for each business transaction.

2. Competency 3: Prepare financial statements from accounting
system data.
Prepare a cash flow statement using appropriate financial data.
This assignment includes two parts. Complete both parts using
the templates provided. Both templates are linked in the
Resources under the Required Resources heading. Submit both
completed templates for the assignment .
Part 1: Types of Cash Inflows and Outflows
You know that the cash flow statement classifies cash receipts
and cash payments as operating, investing, and financing
activities. Before preparing the cash flow statement, accounting
data must be analyzed to locate transactions in both the cash
account and other locations. After the transactions have been
located, it should be determined whether each one affects
operating, investing, or financing cash flow. Last, whether the
transaction results in a cash inflow or outflow must be
ascertained. Accountants consider this statement to be
foundational for a business to continuously operate.
For this part of the assessment, use the Assessment 3, Part 1
Template to classify each of the following cash inflows and
outflows as operating, investing, or financing activities:

3. Sale of a piece of company equipment.
Sale of common stock.
Payment to suppliers for merchandise purchased.
Payment to lenders for interest on note payable.
Sale of investments in other companies.
Purchase of land to expand plant size.
Payment to stockholders as cash dividends.
Sale of goods or services.
Payment to employees for wages and salaries.
Lending of money to other business entities.
Payment to government for property and income taxes.
Collection of principal on loans to other entities.
Interest and dividends received.
Issue of bonds to support company growth.
Purchase of investments in debt or equity of other entities.
Payment to other entities to cover expenses incurred.
Buyback of company stock from investors.

4. Part 2: Cash Flow Statement Preparation
The cash flow statement is an important, and often overlooked,
financial statement. However, it can provide important data for
use by internal organization management. By analyzing the
balance sheet and income statement, the accountant can then
prepare the statement and share the results with both internal
and external users.
Use the assignment 3, Part 2 Template to determine the
appropriate activity (operating, investing, or financing) for each
transaction listed for Skylar Enterprises, Inc., and prepare the
cash flow statement using the indirect method in good form for
reporting. Data is provided in the Information worksheet in the
template; complete the statement of cash flow in the Cash Flow
Statement worksheet. Use the suggested materials in the
Resources if you need more information on preparing cash flow
statements.