FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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The Statement of
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(A)Breaks down all cash transactions into investing and financing cash flows.
(B)Has two methods for investing cash flows—direct and indirect.
(C)Lists all cash flows over the life of a company.
(D)Shows that the change in total cash from one year to the next is equal to the net operating, investing, and financing cash flows.
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- You can determine a company’s cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. Which of the following is true for the statement of cash flows? It reflects cash generated and used during the reporting period. It reflects revenues when earned. Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement. Operating Activity Investing Activity Financing Activity A company reports a 10% increase in its accounts payable from the last month. D and W Co. sells its last season’s inventory to a discount store. Yum Brands distributes dividends to its…arrow_forwardDon't give answer in image formatarrow_forwardThe cash flow statement is divided into three sections: operating, investing, and financing. Know where each item is recorded, such as cash, operational expenses, equipment purchases, and so on.arrow_forward
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- Please do both part 1 and 2arrow_forwardplease help me to check the answersarrow_forwardComplete each of the columns on the table below, indicating in which section each item would be reported on the statement of cash flows (operating, investing, or financing), the amount that would be reported, and whether the item would create an increase or decrease in cash. For item that affect more than one section of the statement, indicate all affected. Assume the indirect method of reporting cash flows from operating activities. Enter all amounts as positive numbers. The first item has been completed as an example. Item Statement Section (operating, financing, investing) Amount to Report +/- Effect on Cash Depreciation of $15,000 for the period Operating $15,000 Increase Issuance of common stock for $35,000 $ Increase in accounts payable of $7,000 $ Retirement of bonds at face value of $100,000 $ Purchase of long-term investments for $94,500 $ Dividends declared and paid of $8,300 $ Increase in Prepaid Rent of $4,500 $ Decrease in…arrow_forward
- XYZ Corp. is selling furniture. The comparative balance sheet and income statement are summarized below. You are also given the following additional information:(see detail as attachements) Requirement: Prepare the statement of cash flows using the indirect method for the year ended December 31, current year. Prepare the Cash Flow from Operating Activities (CFO) using the direct method. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by XYZ Corp during the current year.arrow_forwardans in txt formarrow_forwardProvide iand Create nformation needed to create a Statement of Cash Flows using the Indirect Method. You MUST include: Net Income At least 3 items that go under operating activities. At least 2 items that go under investing activities. At least 2 items that go under financing activities. And 1 non-cash transaction.arrow_forward
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