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4.04 Statement of Cash Flows

4.04 Statement of Cash Flows. Apply procedures for preparing corporate financial statements. Statement of Cash Flows. Heading Section Write the name of the company. Write the name of the statement. Write the date. Statement of Cash Flows. B. Cash Flows from Operating Activities.

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4.04 Statement of Cash Flows

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  1. 4.04 Statement of Cash Flows Apply procedures for preparing corporate financial statements.

  2. Statement of Cash Flows • Heading Section • Write the name of the company. • Write the name of the statement. • Write the date.

  3. Statement of Cash Flows B. Cash Flows from Operating Activities

  4. Statement of Cash Flows B. Steps in Reporting Cash Flows from Operating Activities • Enter the net income as shown on the comparative income statement. • Add the amount of depreciation expense to net income. • Analyze the changes in current assets. • Analyze the changes in current liabilities. • Determine the cash provided by operating activities (cash increases) or the cash used by operating activities (cash decreases).

  5. Statement of Cash Flows C. Cash Flows from Investing Activities

  6. Statement of Cash Flows C. Steps in Reporting Cash Flows from Investing Activities • Analyze changes in long-term assets. (plant assets) • Determine the cash provided by investing activities (if cash increases) or the cash used by investing activities (if cash decreases).

  7. Statement of Cash Flows D. Cash Flows from Financing Activities

  8. Statement of Cash Flows D. Steps in Reporting Cash Flows from Financing Activities • Analyze changes in long-term liabilities. • Analyze changes in cash identified on the statement of stockholders’ equity. • Determine the cash provided by financing activities (if cash increases) or the cash used by investing activities (if cash decreases).

  9. Statement of Cash Flows D. Steps in Completing the Statement of Cash Flows • Compute the net increase or decrease in Cash resulting from operating, investing, and financing activities. • Identify the beginning cash balance from the comparative balance sheet. The beginning cash balance for the current year is the ending cash balance from the prior year. • Compute the ending cash balance. • Verify that the Cash Balance, End of Period matches the cash balance shown on the comparative balance sheet.

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