Statement of Cash Flows Flashcards
What items are included in operating activities on the Statement of Cash Flows?
Cash received from Customers- Interest & Dividends- Trading Securities
Cash paid to Vendors- Suppliers- Interest- Taxes- Trading Securities
What items are included in investing activities on a Statement of Cash Flows?
Cash received: Sale of PP&E- Sale of Investments- Loan Principle
Cash paid: Loans- Acquisitions- AFS or HTM Securities- Taxes- Trading Securities
What items are included in Financing Activities in a Statement of Cash Flows?
Cash received: Issuance of Stock- Issuance of Debt
Cash paid: Dividends
What is the direct method for a Statement of Cash Flows?
Starts with Income from Continuing Operations
Adjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses
If used- the Indirect Method must also be shown
What is the Indirect Method for a Statement of Cash Flows?
Starts with Net IncomeAdjusts for changes in accounts like A/R- A/P- Inventory and non-cash revenues- expenses- gains- losses
cash collections from customers (direct)
operating activity
payments for purchase of PP&E
investing
proceeds from sale of equipment
investing
cash dividends paid
financing
redemption of bonds payable
financing activity
loss on sale of fixed assets (indirect)
operating
issuance of common stock of the company
financing
decrease in accounts payable (indirect)
operating activity
decrease in deferred taxes (indirect)
operating
working capital loan received from a bank
financing
impact on cash flow direct: depreciation expense increased over previous year
no effect
impact on cash flow direct: payment of income taxes previously deferred due to tax vs. financial depreciation differences
decrease
impact on cash flow direct: net A/R lowered
increase
impact on cash flow direct: booked gain on sale of equipment with one year of useful life remaining
no effect
impact on cash flow direct: A/P is lower than in previous year
decrease
impact on cash flow direct: stock held by company as A-F-S is sold for a loss
no effect
impact on cash flow direct: one month rent prepaid to be occupied in next fiscal year
decrease
impact on cash flow direct: portion of outstanding debt issuances are called in at a price above par
no effect
impact on cash flow direct: interest payments are made for remaining company bonds outstanding
decrease
impact on cash flow direct: interest received on a bond classified as held to maturity
increase
impact on cash flow direct: deferred revenue increases over the previous year
increase
impact on cash flow direct: $40,000 in returned goods and issued refunds to customer
decrease
how should bond amortization discount on long term debt be reported in the statement of cash flows using indirect method?
as a deduction of income in operating cash flows
