26_Cash_Flows_1 notes - Indirect Format Direct Format Cash...

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Click to edit Master subtitle style Statement of Cash Flows – 1 Accountancy 301 Professor Clifton Brown 26 December 6, 2010
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Business cycle Acquire  financial  capital Acquire  productive assets Operate  productive assets Financing  activities Inves ting  activi ties Operating  activities
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Operating cash flow formats Net income (loss) Adjust effects of non-cash  items included in net income Cash provided by operations Indirect Method Direct Method Cash received from operating  sources Cash paid for operating  resources Cash provided by operations Reconciliation with  net income
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Direct vs. indirect example Revenues (accrued) $35,400 Net accounts receivable:     Beginning balance $2,800     Ending balance $3,750 What are the cash receipts from customers? 35,400+2800-3750 = 34450 Acct receiveble increased 3750-2800
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Direct vs. indirect example Cash received from customers    34450 Operating assets/liabilities:     Increase in accounts receivable  -950
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Unformatted text preview: Indirect Format Direct Format Cash Flows from Operating Activities Summary of indirect Type of Adjustment Non-cash items that increased income Subtract Non-cash items that decreased income Add. eg. Depreciations Increases in operating assets:eg. Inventories, acct receive, prepaid expenses. Subtract. Decreases in operating assets add Increases in operating liabilities: eg. Add Decreases in operating liabilities subtract Next class Wednesday, Dec Statement of Cash Flows 2 Readings Revsine Chapter 5 (part) Bergevin, Chapter 11 Case Barnes & Noble, Inc. Presentations Teams 6 & 7, 8 & 9 Write ups None Barnes & Borders Team 8 CVS Peer evaluations Complete your peer evaluations and bring to class on Wednesday, December 8 The form is in the Administration folder on the course Compass site...
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26_Cash_Flows_1 notes - Indirect Format Direct Format Cash...

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