Accounting Questions - 1.

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
1. Explain the generation of statement of cash flows. Where does the information come from and how is it  structured? Who uses this report and what info are the interested in? The Statement of Cash Flows is generated using information on current operating results and balance  sheet information. The Statement of Cash Flows has three sections: cash flows from operating activities,  cash flows from investing activities, and cash flow from financing activities. Several categories of actors  utilize information from the Statement of Cash Flows.  Managers within a firm are interested in whether a  company has enough working capital to subsist a going concern. Creditors use the information to gain a  sense of a firm’s liquidity, while investors use the information to gauge a firm’s solvency and profitability. 2. A Credit card company incurred the following cost in acquiring plant assets: -Purchased land for a 50,000 down payment and signed 100,000 note payable for balance. -Delinquent property tax 3,500 and legal fees of 1,500 -8,000 to remove unwanted building -Architect fee of 2,000 for design of a building -Constructed an office building at the cost of 405,000 -Interest cost of construction loan for the building 20,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/01/2012 for the course ACCOUTNING 550 taught by Professor Abner during the Spring '11 term at DeVry Houston.

Page1 / 3

Accounting Questions - 1.

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online