Warren SM_Ch.16_final - CHAPTER 16 STATEMENT OF CASH FLOWS...

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CHAPTER 16 STATEMENT OF CASH FLOWS EXERCISES Ex. 16–1 There were net additions, such as depreciation and amortization of intangible as- sets of $389 million, to the net loss reported on the income statement to convert the net loss from the accrual basis to the cash basis. For example, depreciation is an expense in determining net income, but it does not result in a cash outflow. Thus, depreciation is added back to the net loss in order to determine cash flow from operations. The cash from operating activities detail is provided as follows for class discus- sion: CONTINENTAL AIRLINES, INC. Cash Flows from Operating Activities (Selected from Statement of Cash Flows) (in millions) CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss). ................................................................................ $ (68) Adjustments to reconcile net income (loss) to net cash flow provided by operating activities: Depreciation and amortization. ........................................................... 389 Special charges. ................................................................................... 67 Gain on disposition of investments. ................................................... (204) Undistributed equity in the income of other companies. .................. (62) Other, net. ............................................................................................. (18) Changes in certain assets and liabilities: Decrease (increase) in accounts receivable. .................................. (56) Decrease (increase) in spare parts and supplies. .......................... (7) Decrease (increase) in prepaid expenses. ...................................... (59) Increase (decrease) in accounts payable. ...................................... 80 Increase (decrease) in air traffic liability. ........................................ 318 Increase (decrease) in other liabilities. ........................................... 77 Net cash provided by (used in) operating activities. .............................. $457 1
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Ex. 16–2 a. Cash receipt, $198,000 b. Cash payment, $280,000 c. Cash receipt, $500,000 d. Cash payment, $60,000 e. Cash payment, $260,000 f. Cash payment, $320,000 g. Cash payment, $42,000 h. Cash receipt, $72,000 Ex. 16–3 a. financing b. financing c. financing d. investing e. operating f. financing g. financing h. investing i. investing j. investing k. financing Ex. 16–4 a. added b. added c. deducted d. added e. deducted f. deducted g. deducted h. added i. deducted j. added k. added 2
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Ex. 16–7
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This note was uploaded on 03/26/2012 for the course ACCOUNTING 1A,1B,1C taught by Professor Spinozzi during the Summer '10 term at DeAnza College.

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Warren SM_Ch.16_final - CHAPTER 16 STATEMENT OF CASH FLOWS...

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