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Class26 - SCF - C Illustration 23-1 on page 1214 is very...

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M351 Notes, Class 26: Statement of Cash Flows, pages 1211-1227 Today’s topics: Can we explain the change in the cash balance? This will require understanding the change in every other account. A. The Statement of Cash Flows has three elements: Cash Flows From Operations Cash Flows From Investment Cash Flows From Financing B. There are two methods of preparing Cash Flow From Operations portion of the statement of cash flows: direct and indirect. In M351 this semester, we will only use the indirect method.
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Unformatted text preview: C. Illustration 23-1 on page 1214 is very helpful in identifying the kinds of transactions or business activity that produce one of the three kinds of cash flows. Note that some transactions produce two kinds of cash flows (e.g. payment of principal and interest on a note produces cash flows from financing [principal payment] and from operations [interest payment]). D. On pages 1217-1227 are three examples of the collection of data for the preparation of the statement of cash flows. 1...
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