财务会计专业英语课件10

1、Week 12 Assignment Chapter 5Week 12 Assignment Cash Flow Statement Statement of Cash Flows Cash Flow Statement Statement5.1 The statement of cash flows provides information to help investors, creditors, and others assess the following :1. The entitys ability to generate future cash flows. 2. The ent

2、itys ability to pay dividends and meet obligations. 3. The reasons for the difference between net income and net cash flow from operating activities.4. The cash and noncash investing and financing transactions during the period. Usefulness of the Statement of Cash Flows5.1 The statement of cas5.1 By

3、 reading the statement of cash flows, the reader might find answers to the following questions: Why did cash decrease for Home Depot when it reported net income for the period? How much did Southwest Airlines spend on property, plant, and equipment last year? Did dividends paid by Campbells Soup inc

4、rease? How much money did Coca-Cola borrow last year? How much cash did Hewlett-Packard use to repurchase its common stock?5.1 By reading the statem5.1 short-term, highly liquid investments that are both (a) readily convertible to known amounts of cash, and (b) so near their maturity that they prese

5、nt insignificant risk of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under this definition. Examples of cash equivalents are Treasury bills, commercial paper, and money market funds purchased with cash that is in excess of immediate

6、 needs. Cash equivalents5.1 short-term, highly li5.2 four parts 1. Operating Activities 2. Investing Activities 3. Financing Activities 4. Supplemental5.2 four partsClassification of Typical Cash Inflows and OutflowsClassification of Typical Cash财务会计专业英语课件10general guidelines about the classificatio

7、n of cash flows-11. Operating activities involve income statement items.2. Investing activities involve cash flows resulting from changes in investments and long-term asset items.3. Financing activities involve cash flows resulting from changes in long-term liability and stockholders equity items.ge

8、neral guidelines about the cgeneral guidelines about the classification of cash flows-2Companies classify some cash flows relating to investing or financing activities as operating activities. For example, companies classify receipts of investment income (interest and dividends) and payments of inte

9、rest to lenders as operating activities.Why are these considered operating activities? Companies report these items in the income statement, where the results of operations are shown.general guidelines about the cgeneral guidelines about the classification of cash flows-3companies classify some cash

10、 flows relating to operating activities as investing or financing activities. For example, a company classifies the cash receivedfrom the sale of property, plant, and equipment at a gain, although reported in the income statement, as an investing activity. It excludes the effects of the related gain

11、 in net cash flow from operating activities. Likewise, a gain or loss on the payment (extinguishment) of debt is generally part of the cash outflow related to the repayment of the amount borrowed. It therefore is a financing activity.general guidelines about the c5.3 format-1 P905.3 format-1 P90form

12、at-2format-2Steps in Preparation-1three sourcesComparative balance sheetsCurrent income statementSelected transaction dataSteps in Preparation-1three AssetsCashMarketable SecAccts RecInventoryPrepaid ExpYear-End 2008$ 30,00010,000170,000160,00030,000Year-End 2009$ 35,50010,000200,000180,00020,000Ass

13、etsYear-End 2008Year-End 20AssetsCashAccounts receivableTotalLiabilities and Stockholders EquityAccounts payableCommon stockRetained earningsTotalDec. 31, 200349,00036,000$85,000$ 5,000$60,000$20,000$85,000Jan. 1, 2003$-0-0-$-0-$-0-$-0-$-0-$-0-AssetsDec. 31, 2003Jan. 1, 200Step 1. Determine the chan

14、ge in cash. Step 2. Determine the net cash flow from operating activities. Step 3. Determine net cash flows from investing and financing activities. Steps in Preparation-2Step 1. Determine the change ichanges in balances of in Current Assets(other than cash) and Current Liabilitieschanges in balance

15、s of Long-term Assetschanges in balances of Long-term LiabilitiesStockholders EquityComparative balance sheetschanges in balances of in Cu1. Depreciation Expense2. Proceeds from the sale of equipment used in the business3.The Loss on the Sale of Equipment in Question #2.4. Declaration and payment of

16、 dividends on companys stock 5. Gain on the Sale of Automobile formerly used in the businessThe proceeds from the sale of the automobile in Item #5. 7. An increase in the balance in a retailers Merchandise Inventory8. An increase in the balance in Accounts PayableA1. Depreciation ExpenseA9.Retiremen

17、t of long-term Bonds Payable10. Purchase of Treasury Stock (companys own stock)11. The purchase of a new delivery truck to be used in the businessA decrease in the balance of Accounts Receivable13. An increase in Bonds Payable (a long-term liability)14. A decrease in the current asset account Prepai

18、d Insurance15. A decrease in the current liability Income Taxes Payable16. The proceeds from issuing additional Common StockB9.Retirement of long-term Bon17. The amortization of the cost of an intangible asset The exchange/conversion of long-term bonds into common stock19. An increase in the balance

19、 of Prepaid Insurance20. A decrease in Supplies on hand21. The proceeds from the sale of equipment formerly used in the business22. The Loss on the Sale of Equipment in the previous question23. An increase in the current liability Income Taxes Payable24. A decrease in Accounts PayableC17. The amorti

20、zation of the coAn increase in Accounts Receivable26. An increase in the current liability Warranty Liability27. Dividends declared and paid28. Proceeds from the issuance of Preferred Stock29. The Gain on the Sale of Equipment formerly used in the business30. An increase in the long-term asset Inves

21、tment in Another CompanyDAn increase in Accounts Receiv5.4 methodcash flow from operating activities:direct method-P91indirect method5.4 methodcash flow from operaEarned revenuesIncurred expensesNet incomeEliminate noncash revenuesEliminate noncash expensesNet cash flow from operating activitiesEarn

22、ed revenuesIncurred expensTax Consultants Inc. Comparative Balance SheetsTax Consultants Inc. Comparat财务会计专业英语课件10Tax Consultants Inc.Income StatementFor the year ended December 31, 2013Additional information:A dividend of $14,000 was declared and paid during the year.Tax Consultants Inc.Income St I

23、ndirect Method (reconciliation method) :Tax Consultants Inc.Cash flow statementFor the year ended December 31, 2013 Indirect Method (reconciliati财务会计专业英语课件10Tax Consultants Inc. Comparative Balance SheetsAs of December 31Tax Consultants Inc. Comparat财务会计专业英语课件10Tax Consultants Inc.Income StatementFo

24、r the year ended December 31, 2014Tax Consultants Inc.Income S财务会计专业英语课件10 Indirect Method (reconciliation method) :Tax Consultants Inc.Cash flow statementFor the year ended December 31, 2014 Indirect Method (reconciliati财务会计专业英语课件10财务会计专业英语课件10Tax Consultants Inc. Comparative Balance SheetsAs of De

25、cember 31Tax Consultants Inc. Comparat财务会计专业英语课件10Tax Consultants Inc.Income StatementFor the year ended December 31, 2015Tax Consultants Inc.Income S财务会计专业英语课件10Additional Information(a) Operating expenses include depreciation expense of $33,000 and expiration of prepaid expenses of$2,000.(b) Land

26、was sold at its book value for cash.(c) Cash dividends of $55,000 were declared and paid.(d) Interest expense of $12,000 was paid in cash.(e) Equipment with a cost of $166,000 was purchased for cash. Equipment with a cost of $41,000 and abook value of $36,000 was sold for $34,000 cash.(f) Bonds were

27、 redeemed at their book value for cash.(g) Common stock ($1 par) was issued for cash.Additional Information(a) Oper Indirect Method (reconciliation method) :Tax Consultants Inc.Cash flow statementFor the year ended December 31, 2015 Indirect Method (reconciliati财务会计专业英语课件10财务会计专业英语课件10In this exampl

28、e, we will assume that net income is $110,500, depreciation is $50,000, and the firm pays out dividends in the amount of $65,000. XYZ Company Comparative Balance SheetsPractice 1 : XYZ companyIn this example, we will assumAssetsCashMarketable SecAccts RecInventoryPrepaid ExpYear-End 2008$ 30,00010,000170,000160,00030,000Year-End 2009$ 35,50010,000200,000180,00020,000AssetsYear-End 2008Year-En