More Related Content Similar to 2 cashflows statement Similar to 2 cashflows statement (20) More from Dr. Abzal Basha More from Dr. Abzal Basha (18) 2 cashflows statement2. 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
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
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
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
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