Class Notes (836,564)
Canada (509,855)
Accounting (778)
ACC 110 (74)
Lecture

Preparing the Cash Flow Stmt (Indirect) - Proofs.docx

2 Pages
126 Views
Unlock Document

Department
Accounting
Course
ACC 110
Professor
Marla Spergel
Semester
Fall

Description
Preparing the Cash Flows from Operating Activities Section of the Cash Flow Statement  Step 1— Start with net income  Step 2 — Add and/or subtract any non-cash items, likely depreciation, and gains and losses  Step 3 — Calculate the differences and changes in all balance sheet accounts to determine if there is an increase or decrease for each item, apply the changes in only the NON-CASH WORKING CAPITAL ITEMS (current assets and liabilities) in the OPERATING ACTIVITIES SECTION. (E.G. Adjust for changes like the impact of increases or decreases in the balances of A/R, Inventory, A/P, etc.)  Step 4 — Read all provided additional information to ensure you possess all relevant details to move forward and prepare the actual statement — Calculate PROOFS (as required) CAPITAL ASSET PROOF Opening Balance $ XXX Deduct: Sale of Capital Asset (at Historical Cost) (XX) Add: Purchase of New Capital Asset (at Historical Cost) XX Closing Balance $ XX  Necessary opening and closing balances are obtained from the balance sheet(s) provided. An additional piece of information must also be available to you (either the Proceeds from Sale or the Purchase Price) in order to determine the remaining unknown figure. This info will likely be provided in the additional information for the problem. ACCUMULATED AMORTIZATION PROOF Opening Balance $ XXX Deduct: Acc. Amort. From Sale of Capital Asset (XX) Add: Current Year's Amort. Expense from Income Stmt
More Less

Related notes for ACC 110

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit