Explanation Cash Flow Statement: Cash flow statement refers to the financial statement that shows the summary of increase or decrease in cash in a company for a particular period of time. Cash can be increased or decreased through three activities that are operating, investing and financing activities. Calculation of net cash flow is: E Incorporated Partial statement of cash flows For the year ended December 31 Operating Activities: Amount ($) Net income 7,600 Add: Depreciation 2,400 Less: Increase in accounts receivable (500) Add: Decrease in inventory 1,700 Add: Decrease in prepaid expenses 500 Add: Increase in accounts payable 3,500 Add: I...

1st Edition

ISBN: 9780132162302

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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Chapter 6, Problem 6.16P

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To prepare: The cash flow statement under the indirect reporting format.

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The cash flow statement under the indirect reporting format.

Solution Summary: The author explains that the ending balance of cash flow under the indirect reporting format is 7,000. Cash can be increased or decreased through operating, investing, and financing activities.

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