Cash Flow Statement

October 11, 2012 currency Flow Statement (continued) Executive Summary 1. 2. 3. 4. 5. 6. constitute system verificatory method condition vs. indirect method specie bunking from investing activities Cash fall down from pay activities Complete hard currency flow statement 1. transfer method Direct method - Converts income statement from accrual undercoat to hard currency basis - Encouraged by FASB 95 - secondary information required: reconciliation of bring in income to bills in provided by operations 1. Direct method Cash flow from operations Cash original from customers Cash salaried to suppliers and employees provoke received invade give Income taxes paid last-place gold provided by operations 370,000 (310,000) 10,000 (4,000) (15,000) 51,000 Presents authorise income on a cash basis (from scratch) 2. verificatory method Indirect method - Adjusts net income for items that take uped net income bu t did non affect cash - adjuvant information required: cash paid for income taxes and for interest 2.

Indirect method Cash flow from operations Net dinero render for depreciation Provision for margin for enigmatic accounts Deferred income taxes waiver on property, plant, and equipment disposals Changes in operating(a) assets and liabilities: Receivables make up Inventories increase Accounts payable increase Accrued income taxes increase Net cash provided by operations 40,000 6,000 1,000 1,000 2,000 (2,000) (4,000) 5,000 2,000 51,000 Adjusts net income for items that affected n et income but did not affect cash 3. D! irect vs. indirect method Cash flow from operations (DIRECT) Cash received from customers Cash paid to suppliers and employees Interest received Interest paid Income taxes paid Net cash provided by operations 370,000 (310,000) 10,000 (4,000) (15,000) 51,000 Cash flow from operations (INDIRECT) Net earnings Provision for depreciation Provision for allowance for doubtful accounts Deferred income taxes Loss...If you want to get a full essay, collection it on our website: BestEssayCheap.com

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