Essay Wiley Plus Chapter 12 Answers

DQ 2:  Why, and to whom, is the statement of cash flow useful? What is the most important section of the statement of cash flows for investors? Why?

The statement of cash flow shows the amount of increase or decrease in cash that the company has on hand every quarter. This statement reports what a company pays out each quarter. Most of the time when a company has a major contract the money won’t be received until a later date.

The company also had a cash inflow as a result of it being stated in the consolidated statements of cash flow. It states that they received money from reimbursements and revenue. (31)

The cash flow statement on p74 is a summary of all the transactions that affected the cash account for the year. The cash flow statement helps to predict future cash flows. It helps to evaluate management decisions. Wise decisions lead to profits and strong cash flows, and vice versa. The investment activities show what investments the company is making. Cash flow statements also determine the company’s ability to pay dividends and debts. From the

The cash flow statement shows the amount of cash within a company. Items that affect the cash balance are listed on the statement. The first section of the cash flow statement is operating activities, which shows the cash flowing in and out of the company in relation to its business operation. The operating activities section also includes net income and the change in dollars of certain accounts listed on the balance sheet. The next section, investing activities, shows cash the company received and spent on a company's capital investments. The financing activities section shows the inflows and outflows of cash related to the company’s issued financial securities, which is also listed on the balance sheet and statement of shareholders' equity.

The statement of cash flows breaks down the cash exchange of the long term debt for the past two years. Under the Financing Activities portion of the cash flows statement it shows the long term debt broken down intoproceeds from and repayment of bank loans. The calculations of the changes in the past two years are expressed below in thousands:

1) Which one of the following items is not generally used in preparing a statement of cash flows?

The cash flow statement consists of three parts: cash flows provided by operating activities of $13,831, cash flows provided by investing activities, and cash flows provided by financing activities effect of exchange rate changes on cash and cash equivalents of ($204)

DQ 1:  Why are companies required to prepare a statement of cash flows?  What are the three sections of the statement of cash flows and what does each section tell you about the operations of a company?

A statement of cash flows will report cash flows from which of the following activities?

The following questions relate to the statement of cash flows of a not-profit health care organization.

The cash flow (CFS) statement represenst revenue and expenses for a specific period of time (Sticker, 2012). . The CFS details exactly where cash is being derived and spent and may be generated at any time for analysis (Finkler, Jones, and Koyner, 2013).

      The Statement of Cash flows is a very useful financial statement that can benefit investors, managers and even auditors. The statement of cash flows has not been around as long as the other financial statements such as the balance sheet or income statement. It basically “illustrates the way accounting evolves to meet the requirements of users of financial statements.” (Marshall, 2003) The statement of cash flows is designed to provide important information about the cash that a company has received or has paid out during a certain time period. It provides a reason for the changes of cash received and paid by a company by taking into

| Below is an excerpt from the cash flow statement of a firm for fiscal year 2003: Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Amortization of software Tax benefits of employee stock plans Special charges (Gains)/losses on investments Change in operating assets and liabilities: Receivables Inventories Pension assets Other assets Accounts payable Pension liabilities Other liabilities Net cash provided by operating activities Cash flows from investing activities: Payments for plant and other property Proceeds from disposition of plant and other property Investment in software

The balance sheet reports the resources of the company with three main components broken down into an algebraic equation (assets = liabilities + owner equity). The income statement reports the amount of net income earned by a company during a specific time. The net income is an excess of revenue over expenses. The statement of cash flow reports the amount of cash collected and paid out by a company in the following three ways: operating, investing, and financing (Albrecht, Stice, Stice, and Swain, 2008).