The initial current assets plus the $25,000 increase in current assets other than cash plus the $41,500 rise in cash equals $301,500, according to another method of computation. Information is available to calculate all asset values except current assets. Current assets can be calculated by subtracting the total of all other asset balances from the overall asset balance (i.e., $556,000 - $37,500 - $201,000 - $16,000). Preparing the Statement There are two acceptable methods for reporting a statement of cash flows: the direct and the indirect methods. The quantity of total assets may be calculated since it is equal to the sum of total liabilities and equity. That is, since information is available to calculate this amount, total liabilities and equity are computed. Retained earnings ($44,000 + $55,000 - $25,000)ī)The sum calculated for current assets could be the last to be calculated and is then used as a "plug" value. Increase in current assets other than cash Increase in current assets during the period Net cash provided by financing activitiesĪ An additional proof to arrive at the increase in cash is provided as follows: Net cash provided by operating activities Increase in current assets (other than cash) Prepare a statement of financial position at December 31, 2022. Prepare a statement of cash flows for 2022.ī. (Show only totals for current assets and current liabilities.)Ī. Without the individual receivable and payable accounts, the manual manipulation to. Treasury shares were purchased at a cost of $11,000. Preparing a cash flow statement using the direct method can be as easy as using the indirect method, if the lines that will be displayed are given some forethought and individual receivable and payable accounts are set up for each line in the preceding year. Further, IAS 7 requires all entities to present a Statement of Cash Flows with no exceptions (IAS 7.3). Cash dividends of $25,000 were declared and paid.ġ0. A Statement of Cash Flows is part of an entity’s complete set of financial statements in accordance with paragraph 10 of IAS 1 ‘Presentation of Financial Statements’ (IAS 1.10). A long-term investment in debt securities was purchased for $16,000.ĩ. An addition to the building was completed at a cost of $27,000.ħ. Current liabilities increased by $13,000.Ħ. Current assets other than cash increased by $25,000. Depreciation expense was $4,000 on the building and $9,000 on equipment.ĥ. Equipment (cost $20,000 and accumulated depreciation $8,000) was sold for $9,000.ģ. The following information is available for 2022.Ģ.
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