MGAB02H3 Lecture Notes - Lecture 8: Common Rule, Capital Structure, Longrun

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oliveantelope729

9 Aug 2016

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The statement of cash flows explains how the cash balance at the beginning of the period changed to another cash balance at the end of the period: the definition of cash includes cash and cash equivalents. Cash equivalents are short-term, highly liquid investments with an original maturity of less than 3 months, and subject to an insignificant risk of changes in value. I. e. treasury bills, money market funds, and commercial paper. The statement of cash flows reports cash inflows and outflows based on 3 broad categories: operating activities. Cash flows from operating activities are cash inflows and outflows directly related to earnings from normal operations. There are 2 alternative approaches for presenting the operating activities section of the statement: the direct method. The direct method of presenting the operating activities section of the statement of cash flows reports components of cash flows from operating activities as gross receipts and gross payments.

Related Questions

The Blackbeard Company Ltd provided the following information in regard to its operations for the year ended 30 June 2014:

Cash Book Summary
Opening balance	$20,000	Accounts Payable	$40,000
Accounts receivable	100,000	Bills Payable (suppliers)	20,000
Bills Receivable (suppliers)	20,000	Interest paid	60,000
Debenture Issue	400,000	Operating expenses	180,000
Dividends received	20,000	Salaries & wages	200,000
Interest received	40,000	Current tax payable	80,000
Motor vehicles	60,000	Plant & machinery	100,000
Share capital	200,000	Dividend paid	120,000
		Balance c/d	60,000
	860,000		860,000
Balance b/d	60,000

Required:

(a) Net cash used in operating activities; (b) Net cash used in investing activities; (c) Net cash from financing activities;

(d) Net increase/(decrease) in cash and cash equivalents.

Please use the following format

*Statement of Cash Flows for Blackbeard Company*
*For the Financial Year Ended 30 June 2014*
( i ) Cash flows from Operating Activities	Inflows/	Inflows/
	(Outflows)	(Outflows)










Net cash used in operating activities

( ii ) Cash flows from Investing Activities


Net cash used in Investing Activities

( iii ) Cash flows from Financing Activities

violetcoyote644

Please give an original response to the following statement:

The Balance Sheet reports cash and cash equivalents. The Consolidated Statement of Cash Flows reports cash receipts and cash payments in each of the three categories: Operating activities, Investing activities, and Financing activities. Companies operate by selling goods and services to customers. Operating activities result in net income or net loss, and they either increase or decrease the cash.

aquamarineminnow769

Which of the following statements are correct (Select all that apply):

A. A balance sheet reports on investing and financing activities.

B. An income statement reports on financing activities.

C. The statement of equity reports on changes in the accounts that make up equity.

D. The statement of cash flows reports on cash flows from operating, investing, and financing activities over a period of time.

E. A balance sheet reports on a company's assets and liabilities over a period of time

orchidhorse286

MGAB02H3 Lecture Notes - Lecture 8: Common Rule, Capital Structure, Longrun

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