Question

1.How are purchases and sales reported on the statement of cash flows? 2.“Depreciation is an integral...

1.How are purchases and sales reported on the statement of cash flows?

2.“Depreciation is an integral part of cash flows statement”. Explain what it means.

3.A company used cash for both operating and investing activities, but had a positive cash

flow from financing activities. What does this cash flow pattern suggest about this

company?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
1. In Direct method , Amount receipt on account of cash sale made and from account receivable is shown in Cash Flow statement.
Amount Paid to supplier for purchase of material is shown in cash Flow Statement
In Indirect method , Net Income is shown in operating activities which is resultant of sales and purchase made during the year and net income earned from operating activities , no sale and purchase amount are not shown directly in cash flow statement .
2. Yes , it can be said that Depreciation is integral part of Cash flow Statement because , Depreciation is a non cash expense which need to added back in Net Income , to get actual amount cash flow from Operating activities
3. In Such cash, it shows that company is raising fund from various sources to meet excess outflow from operating activities
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1）In the statement of cash flows, in which section is the cash payment of salaries reported?...
1）In the statement of cash flows, in which section is the cash payment of salaries reported? A. Operating Activities B. Investing Activities C. Financing Activities D. Schedule of Noncash Transactions E. None of the above 2）In the statement of cash flows, in which section is the cash payment of dividends reported? A. Operating Activities B. Investing Activities C. Financing Activities 3）In the statement of cash flows, in which section is the cash receipt from the issuance of common stock reported?...
The accountant for TI Company is preparing the company's statement of cash flows for the fiscal...
The accountant for TI Company is preparing the company's statement of cash flows for the fiscal year just ended. The following information is available: Retained earnings balance at the beginning of the year 151,000 Cash dividends declared for the year 46,000 Net income for the year 92,000 16) What is the ending balance for retained earnings? A. 264,000 B. 13,000 C. 243,000 D. 197,000 E. 105,000 17) Noncash investing and financing activities may be disclosed in A. A notes in...
True or False 1. The approach to preparing the cash flow statement relies on the following...
True or False 1. The approach to preparing the cash flow statement relies on the following rearrangement of the balance sheet equation: Change in cash = Change in (Liabilities + Stockholders' Equity + Noncash Assets). 2. Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows. 3. In the decline phase, the company continues to enjoy positive operating cash flows but stops spending cash on investing...
1. Why do we need to add back to net income non-cash transactions and changes in...
1. Why do we need to add back to net income non-cash transactions and changes in working capital assets when using the indirect method? 2. A company used cash for both operating and investing activities, but had a positive cash flow from financing activities. What does this cash flow pattern suggest about this company? 3. Sales for Harlem Tool & Die during 20X1 was $600,000, 75% of them on credit and 25% for cash. During the year, accounts receivable increased...
TRUE OR FALSE: 1. Major investing and financing activities that do not involve cash do not...
TRUE OR FALSE: 1. Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows. 2. The payment of interest on bonds is classified as a cash outflow from operating activities on the statement of cash flows. 3. A healthy company typically shows positive cash flows in the financing activities section of the statement of cash flows. 4. In general, the cash flow from operating activities is...
The current period statement of cash flows includes the following: Cash balance at the beginning of...
The current period statement of cash flows includes the following: Cash balance at the beginning of the period $295,000 Net cash flow from operating activities 192,000 Net cash flow used for investing activities 37,000 Net cash flow used for financing activities 104,000 The cash balance at the end of the period is
If a company is using the indirect method to prepare the statement of cash flows, identify...
If a company is using the indirect method to prepare the statement of cash flows, identify where an increase in the accounts receivable account should be reported: Multiple Choice An increase in cash flows from operating activities An increase in cash flows from investing activities A decrease in cash flows from operating activities A decrease in cash flows from investing activities An increase in cash flows from financing activities
The statement of cash flows reports all but which of the following: Multiple Choice Cash flows...
The statement of cash flows reports all but which of the following: Multiple Choice Cash flows from operating activities. Cash flows from financing activities. Cash flows from investing activities. Significant noncash financing and investing activities. The financial position of the company at the end of the accounting period.
1.) Why is the statement of cash flows a useful document? 2.) Define the following terms...
1.) Why is the statement of cash flows a useful document? 2.) Define the following terms as they relate to the statement of cash flows: cash flows: cash, operating activities, investing activities, and financing activities. 3.) How does the direct method differ from the indirect method?
A statement of Cash Flows contains the following sections: Cash Flows from Operating Activities Cash Flows...
A statement of Cash Flows contains the following sections: Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Investing and Financing Activities NOT affecting cash A list of items that appear on the Cash Flows Statement appear below: Using the letters (A-D), indicate in which section(s) of the statement of cash flows (or accompanying schedule) the preceding items would most likely be classified       -       A.       B.      ...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT