Ch6 - Chapter 6 The Statement of Cash Flows E 6-1...

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Chapter 6 The Statement of Cash Flows E 6-1 Transactions Affecting Cash Flows Effect on Cash Transaction Increase Decrease No Effect a. Amortization of intangible asset X b. Conversion of preferred stock to common stock X c. Sales on account X d. Purchase of inventory on account X e. Declaration of a dividend X f. Payment of accounts payable X g. Collection of accounts receivable X h. Depreciation on factory building X i. Sale of building at a loss X j. Retirement of debt through issuance of common stock X E 6-2 Types of Activities Affecting Cash Flow a. Payment of federal income taxes 1 Operating b. Dividend payments to shareholders 3 Financing c. Repayment of short–term obligations 3 Financing d. Loans made to another company 2 Investing e. Payments made to acquire a business 2 Investing f. Salaries paid to employees 1 Operating g. Interest paid to lenders 1 Operating h. Dividends received from investments 1 Operating i. Cash paid to acquire treasury stock 3 Financing E 6-5 Classifying Cash Flow Activities a. Financing activity, increase cash b. Investing activity, increase cash c. Financing activity, decrease cash d. Operating activity, decrease cash e. Investing activity, decrease cash f. Investing and financing, non-cash transaction g. Financing activity, decrease cash E 6-6 Format of the Statement of Cash Flows 1. Wilcox Inc. Statement of Cash Flows For the Year Ended December 31, 2006 Cash flows from operating activities: Receipts from customers $276,000
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Payments for inventory (211,200) Payments for operating expenses (62,400) Payments for interest
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This note was uploaded on 04/11/2009 for the course ACCT 410x taught by Professor Bonner during the Fall '06 term at USC.

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Ch6 - Chapter 6 The Statement of Cash Flows E 6-1...

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