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Unformatted text preview: increase can be explained by two factors: (1) Net income of $145,000 increased retained earnings. (2) Dividends of $29,000 decreased retained earnings. The company adjusts net income to net cash provided by operating activities in the operating activities section. Payment of the dividends (not the declaration) is a cash outflow that the company reports as a financing activity . Statement of Cash Flows—2010 Using the previous information, we can now prepare a statement of cash flows for 2010 for Computer Services Company as shown in Illustration 12-14 . Helpful Hint Note that in the investing and financing activities sections, positive numbers indicate cash inflows (receipts), and negative numbers indicate cash outflows (payments). 12-14 Statement of cash flows, 2010—indirect method...
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- Spring '11
- Cash Flow Statement, Generally Accepted Accounting Principles