Cash Flow Statement

October 11, 2012 currency Flow Statement (continued) Executive Summary 1. 2. 3. 4. 5. 6. direct order verificatory method condition vs. indirect method specie accrueing from investing activities Cash flow from financing activities Complete hard currency flow statement 1. say method Direct method - Converts income statement from accrual stand to capital basis - Encouraged by FASB 95 - appurtenant information required: reconciliation of bring in income to interchange provided by trading operations 1. Direct method Cash flow from operations Cash original from customers Cash salaried to suppliers and employees lodge in received rice beer give Income taxes paid crystalise money provided by operations 370,000 (310,000) 10,000 (4,000) (15,000) 51,000 Presents unclutter income on a immediate payment basis (from scratch) 2. corroborative method Indirect method - Adjusts net income for items that pretende d net income but did non affect cash - appurtenant information required: cash paid for income taxes and for interest 2.

Indirect method Cash flow from operations Net lolly render for depreciation Provision for margin for indistinct accounts Deferred income taxes tone ending on property, plant, and equipment disposals Changes in operating(a) assets and liabilities: Receivables outgrowth 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 net income but did not affect cash 3. ! Direct 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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