MATERIAL DE CLASE - Chapter 23

MATERIAL DE CLASE - Chapter 23 - effect on cash. Net Cash...

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Classification of Cash Flows
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Classification of Cash Flows
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Format of the Statement of Cash Flows Presentation: 1. Operating activities. 2. Investing activities. 3. Financing activities. Direct Method Indirect Method Report inflows and outflows from investing and financing activities separately .
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Format of the Statement of Cash Flows
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Three Sources of Information: 1. Comparative balance sheets. 2. Current income statement. 3. Selected transaction data. Steps in Preparation Three Major Steps : Step 1. Determine change in cash. Step 2. Determine net cash flow from operating activities. Step 3. Determine net cash flows from investing and financing activities.
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Sources of Information for the Statement of Cash Flows 1. Comparative balance sheets. 2. An analysis of the Retained Earnings account. 3. Writedowns, amortization charges, and similar “book” entries, such as depreciation, because they have no
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Unformatted text preview: effect on cash. Net Cash Flow from Operating Activities Indirect Versus Direct Method Adjustments Needed to Determine Net Cash Flow from Operating Activities. Indirect Method Net Cash Flow from Operating Activities Indirect Versus Direct Method Companies adjust each item in the income statement from the accrual basis to the cash basis. Direct Method Significant Non-Cash Transactions Common non-cash transactions that a company should disclose: 1. Acquisition of assets by assuming liabilities (including finance lease obligations) or by issuing equity securities. 2. Exchanges of non-monetary assets. 3. Refinancing of long-term debt. 4. Conversion of debt or preference shares to ordinary shares. 5. Issuance of equity securities to retire debt....
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MATERIAL DE CLASE - Chapter 23 - effect on cash. Net Cash...

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