WRD_ch16_SV - 11-116-1Statement of Cash Flows16Student

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Unformatted text preview: 11-116-1Statement of Cash Flows16Student Version11-216-216-21Describe the cash flow activities reported in the statement of cash flows11-316-3The statement of cash flowsreports a firms major cash inflows and outflows for a period. It provides useful information about a companys ability to do the following:1.Generate cash from operations1.Maintain and expand its operating capacity1.Meet its financial obligations1.Pay dividends111-416-4Cash Flows from Investing ActivitiesCash inflowsfrom investing activitiesnormally arise from selling fixed assets, investments, and intangible assets.Cashoutflowsfrom investing activitiesnormally include payments to acquire fixed assets, investments, and intangible assets.111-516-5Cash inflowsfrom financing activitiesnormally arise from issuing debt or equity securities.Cashoutflowsfrom financing activitiesnormally include paying cash dividends, repaying debt, and acquiring treasury stock. Cash Flows from Financing Activities111-616-6Noncash investing and financing activitiesare transactions that do not directly affect cash. The effect of such transactions is recorded in a separate schedule that appears at the bottom of the statement of cash flows.Noncash Investing and Financing Activities111-716-716-72Prepare a statement of cash flows, using the indirect method.11-816-8The analysis of Retained Earningsprovides a good starting point for determining the cash flows from operating activities....
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This note was uploaded on 04/13/2010 for the course ACTG 1A q taught by Professor T during the Fall '09 term at Foothill College.

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WRD_ch16_SV - 11-116-1Statement of Cash Flows16Student

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