Hbr – Cash Flow Stattement – Chemalite.
Exercises Classification of Cash Flows
For each event listed below, select the appropriate category which describes the effect of the event on a statement of cash flows:
a. Cash provided/used by operating activities.
b. Cash provided/used by investing activities.
c. Cash provided/used by financing activities.
d. Not a cash flow. C/A
Payment on long-term debt (company pays INTEREST only) – think about this how this could be both – related to debt because financing and operating because it’s part of operations C
Issuance of bonds at a premium A
Collection of accounts receivable D
Cash dividends declared – it’s not a cash flow D
Issuance of shares to acquire land (“exchange” of shares for land) – no cash exchanges here B
Sale of marketable securities (long-term) – A
Payment of employees’ wages C
Issuance of common shares for cash A/?
Payment of income taxes payable – could be the disposition of property, etc. then this will fall under-investing B
Purchase of equipment B
Purchase of common shares in another company B
Sale of real estate held as a long-term investment
Impact on earnings
Impact on cash flows
Cash flow classification
Issue 1,000 shares for $10,000
Dr. cash (BS) 10K Cr. Common shares 10K
INFLOW of 10k
Introduction to Cash Flow construction The Controller of Schmidt Tooling Corporation has provided you with the following information: Schmidt Tooling Corporation| Income Statement| For the Year Ended December 31, 2010.
Income from operations
Gain on sale of equipment
Income before income taxes
Comparative Account Information. Relating to Operations.
For the Year Ended December 31, 2010
Income taxes payable
Instructions: Prepare a statement of cash flows (for the company’s operating activities only) for the year ended December 31, 2010, using the indirect format.