Question

PLEASE NO COPIED OR HANDWRITTEN ANSWERS

What is the first section of the statement of cash flows and what does it include?

Answer 1

First Section of the Statement of Cash flows is," Cash Flows from Operating Activities" which  Includes

Net Income

Non Cash expenses like Depreciation and Amortization

Gain/Loss from Sale of Plant and Equipment

Increase /Decrease of Current Assets like accounts receivable, inventory, prepaid expenses

Increase/Decrease of Current Liabilities like accounts payable, accrued expenses

Example of first section of the statement of cash flows is given below:

CASH FLOW FROM OPERATING ACTIVITIES:
Net Income	$112,575
Adjustments to reconcile net income to net cash:
Depreciation (non cash expense)	$26,750
Loss on sales Plant asset	$11,125
(Increase)/Decrease in Current Assets:
Increase in Accounts Receivable	-$18,205
Increase in Inventory	-$26,856
Decrease in Prepaid expense	$745
Increase/(Decrease) in Current Liabilities:
Decrease in Accounts Payable	-$64,534
NET CASH PROVIDED BY OPERATING ACTIVITIES	$41,600