completion: understanding the three sections of the cash flows statement

Expert Solution

Cash flow statement

There are three types of activities which result in cash movement and those activities are explained below:

A. Cash from operating activities: Change in cash occurring due general business activities get recorded under cash from operating activities. The general business transactions in cash like rent payments, vendor payments, receipts from debtor, tax payment, salary payment, additions to accrued income and other relates direct or indirect business expenses.

B. Cash from investing activities: The ‘cash in’ and ‘cash out’ activities which are related to long term asset positions are classified as cash from investing activities. The activities like sale or purchase of plants, equipment, any mergers and acquisitions, sale or purchase of marketable securities basically result in cash from investing activities.

C. Cash from financing activities: The ‘cash in’ and ‘cash out’ activities which are related to long liabilities are classified as cash from financing activities. The activities like raising equity capital, repayment of debt, proceeds of debt capital, repayment of leases basically result in cash from investing activities.

In above we have broadly covered three sections of cash flow statement.

jeff jeffy answered 2 years ago

CASH FLOWS PROBLEM REQUIRED: Prepare the three sections of the statement of cash flows. Be certain...

CASH FLOWS PROBLEM REQUIRED: Prepare the three sections of the statement of cash flows. Be certain to label all numbers presented. The HUBB Corporation has the following information available from the 2020 Income Statement and the 2019 and 2020 comparative balance sheets: Sales $ 450,000 COGS - 220,000 GP 230,000 - Oper Exp - 130,000 - Interest Exp -10,000 + Gain on Sale + 2,000 - Taxes - 32,000 Net Income 60,000 2020 2019 Cash $49,000 $62,000 Acct Receivable 55,000...

“The ordering of the three sections of the statement of cash flows is ‘backwards’ for start-up...

“The ordering of the three sections of the statement of cash flows is ‘backwards’ for start-up firms, but it is more appropriate for businesses once they are up and running.” Explain.

The three sections on the Statement of Cash Flows are Multiple Choice Assets, Liabilities and Equity...

The three sections on the Statement of Cash Flows are Multiple Choice Assets, Liabilities and Equity Operating, Investing and Financing Revenue, Expenses and Net Income I do not know Beginning cash, Ending cash and Change in cash

REQUIRED: Prepare the three sections of the statement of cash flows. Be certain to label all...

REQUIRED: Prepare the three sections of the statement of cash flows. Be certain to label all numbers presented. The HUBB Corporation has the following information available from the 2020 Income Statement and the 2019 and 2020 comparative balance sheets: Sales $ 450,000 COGS - 220,000 GP 230,000 - Oper Exp - 130,000 - Interest Exp -10,000 + Gain on Sale + 2,000 - Taxes - 32,000 Net Income 60,000 2020 2019 Cash $49,000 $62,000 Acct Receivable 55,000 40,000 Inventory 190,000...

1. List the three sections of the Statement of Cash Flows and briefly explain what activities...

1. List the three sections of the Statement of Cash Flows and briefly explain what activities are included in each section. 2. What can creditors, investors, and other users learn from the analysis of the cash flow statements? 3. Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows when using the indirect method. 4. Leather Shop earned net income of $57,000 after deducting depreciation...

Talk briefly about the sections of statement of cash flows.

Prepare the cash flows from investing and financing activities sections of HHC's statement of cash flows.

The following are summary cash transactions that occurred during the year for Hilliard Healthcare Co. (HHC): Cash Received from: Customers ........................................................$660,000 Interest on note receivables ..........................12,000 Collection of note receivable.......................100,000 Sale of land ..........................................................40,000 Insurance of common stock..........................200,000 Cash paid for: Interest on note payable .................................18,000 Purchase of equipment .................................120,000 Operating expenses .......................................440,000 Dividends to shareholders .............................30,000 Prepare the cash flows from investing and financing activities sections of HHC's statement of cash flows.

Which of the following sections on a statement of cash flows is used to report the...

Which of the following sections on a statement of cash flows is used to report the cash flow effects of transactions involving a company's stock? a.Financing Activities b.Operating Activities c.Investing Activities d.Profit Activities Moore Industries began operations on January 2, 2017, with an investment of $50,000 by each of its two stockholders. Net income for its first year of business was $240,000. Moore Industries paid a total of $100,000 in dividends to its stockholders during the year. Read the information...

Discuss the Statement of Cash Flows, including the various sections and why this statement is important...

Discuss the Statement of Cash Flows, including the various sections and why this statement is important to the users of the financial statements. Points to consider include how this statement ties to the Income Statement but also why this statement is valuable in its own way beyond the other financial statements discussed.

Document your understanding of the Statement of Cash Flows and its preparation?

Question