All categories

3 years ago

Preparation of a statement of cash flows involves five steps:

Business

1 answer:

adelina 88 [10]3 years ago

4 0

Answer:

Preparation of a statement of cash flows involves five steps

1. Compute net cash provided or used by operating activities.

This is the section where all the cash flow that belongs to the operating section are been added and subtracted according to the inflow and outflow of the transaction.

2. Compute net cash provided or used by investing activities.

This is the section where all the cash flow that belongs to the investing section are been added and subtracted according to the inflow and outflow of the transaction.

3. Compute net cash provided or used by financing activities.

This is the section where all the cash flow that belongs to the financing section are been added and subtracted according to the inflow and outflow of the transaction.

4. Compute the net increase or decrease in cash

This is the section where the cash-flow from operating, investing and financing activities is been balanced.

5. Report the beginning and ending cash balances and prove that the ending cash balance is explained by net cash flows.

After the cash-flow from operating, investing and financing activities is been calculated, Then, this section is also computed to derive the Closing/Ending cash balance

You might be interested in

Refer to the following selected financial information from McCormik, LLC. Compute the company's current ratio for Year 2. Year 2

swat32

Answer: 3.39

Explanation: Current ratio can be defined as a liquidity ratio which is used by the accountants the evaluate the ability of the company to pay its short term obligations. It can be computed as follows :-

$current\ ratio=\frac{curret\ assets}{current\ liabilities}$

where,

current assets = $38,500 + $100,000 + $90,500 + $126,000 + $13,100 = $368,100

current liabilities = $108,400

now putting the values into equation we get :-

$current\ ratio=\frac{368,100}{108,400}$

= 3.39

8 0

4 years ago

Project A as well as project B require an initial investment of $1,050,000, have a 6-year life, and have expected total cash inf

miss Akunina [59]

Answer:

Proposal A

3.75 years

Proposal B

3.375 years

Explanation:

<u>Proposal A</u>

Payback = 3.75 years

Year Cash Inflow Initial Investment Balance Year Count

0 0 1,050,000

1 $280,000 770,000 1

2 $280,000 490,000 2

3 $280,000 210,000 3

4 $280,000 0 *3.75

* 1050,0000 / 280,000 = 3.75 years

<u>Proposal B</u>

Payback = 3.375 years

Year Cash Inflow Initial Investment Balance Year Count

0 0 1,050,000

1 $350,000 700,000 1

2 $3150,000 385,000 2

3 $280,000 105,000 3

4 $280,000 0 *3.375

* ( 3 + ( 105,000 / 280,000 ) ) = 3.75 years

5 0

3 years ago

What happens to price when the cost of resources rise and falls

JulijaS [17]

In any business, when the cost of resources rise, the price of buying the commodity will also be high, this is because when it cost you much to produce a commodity, you will end up charging a higher price when selling it. Failure to do so may lead to making loses. The opposite is also true, when the cost of resources fall, the pricing will also be less.

6 0

3 years ago

Draw five sector of macroeconomic model

solong [7]

Answer:

Here's my Macroeconomic model.

Explanation:

Thus, the five-sector model includes (1) households, (2) firms, (3) government, (4) the rest of the world, and (5) the financial sector. The financial sector includes banks and non-bank intermediaries that engage in borrowing (savings from households) and lending (investments in firms).

8 0

3 years ago

Devon, an accounts manager at a large electronics firm, does not have any direct international responsibilities; however, Devon

Nonamiya [84]

Answer:

Develop International management skills

Resolve commercial challenges. ...

Explanation:

Devon would most likely benefit from studying international business issues because it will help him:

1. Develop Management Skills: Devon might grow to a management position in an international company without having the required skills and knowledge on how to manage a multi-cultural business environment.

2. Resolve Commercial Challenges: Although Devon does not have international responsibilities, he might be appointed into a team or would be much more valued in the company if he proffers solution to commercial challenges. The ability to do so will be gained with a study in international business.

5 0

3 years ago