Cash Flows Flashcards
78 passing September 8th
What is payment of interest classified as under US GAAP
Operating Activity
What is payment of dividend classified as
Financing Activity
What is payment to acquire stock classified of another company
Investing Activity
Under IFRS payment of dividends may be classified as
Operating or Financing
Interest paid and collected is
Operating Cash Flow
Shares issued and dividends paid
Financing Cash Flow
Cash Flow per share is
not allowed for GAAP - allowed for IFRS
Paying Dividends and treasury stock transactions are
Financing
Indirect M operating - increase current operating liabilities
add to net income
Indirect M operating - decrease current assets
add to net income
Indirect M operating - increase current assets
subtract net income
Indirect M operating - decrease current operating liabilities
subtract net income
Indirect M operating - non-cash losses and expenses included in net income
add to net income
Indirect M operating - losses and expenses cash effects related to investing or financing
add to net income
Indirect M operating - non-cash gains and revenues included in net income
subtract net income
Indirect M operating - gains and revenues cash effects related to investing or financing
subtract net income
Cash paid for income tax
Income tax expense + - tax payable + - tax deferred
To reconcile cost of goods sold to cash paid to suppliers
- determine purchases
2. determine cash paid for goods sold by adding the decrease in accounts payable to purchases.
Equipment purchased with note payable
non cash financing and investing - disclosed outside statement of cash flows
Net cash from operating actives calculated indirectly by
Removing from net income the effects of (1) all deferrals of past operating cash receipts and cash payments, (2) all accruals of expected future operating cash receipts and cash payments, (3) all financing and investing activities, and (4) all noncash operating transactions.
Required disclosures for the cash flow statement
Information about all material investing and financing activities that affect recognized assets or liabilities but not cash flows must be disclosed.
Cash collected from customers
Beginning accounts receivable $XXX Sales (accrual basis) XXX Ending accounts receivable (XXX) Cash collected from customers $XXX
Cash paid to suppliers
Beginning accounts payable $XXX Purchases (accrual basis) XXX Ending accounts payable (XXX) Cash paid to suppliers $XXX
Interest Paid
Beginning interest payable $XXX Interest expense (accrual basis) XXX Ending interest payable (XXX) Interest paid during the period $XXX
Expenses Paid
Ending prepaid expenses $XXX Current-period expense (accrual basis) XXX Beginning prepaid expenses (XXX) Expenses paid during the period $XXX
Indirect Method supplemental disclosure
Interest Paid/Taxes Paid
Financing Activities - Cash Inflows
cash from issuing shares, loans, notes, and bonds
Financing Activities - Inflows
repayment of cash borrowed, cash dividends, treasury stock, capital lease
A/R turn over ratio
Net Credit Sales/ Average A/R Balance
Tax Expense
Taxes Payable Beg. Bal. + Expense (provision for income tax) – End taxes payable bal.
Cash equivalents
no effect on cash flow statement
Amortization bond discount J/E
debit interest expense, credit discount - non-cash transaction reduces net income so added to operating cash flow
Cash paid for COGS
The first step is to determine purchases by subtracting the decrease in inventory from cost of goods sold.
The second step is to determine cash paid for goods sold by subtracting the increase in trade accounts payable from purchases
