Statement of Cash Flow Non Cash Items

In this presentation, we will take a look at the statement of cash flows non cash items. First question, why would we be looking at non cash items when considering a statement of cash flows? We’re gonna go through a list of non cash items first and see if you can recognize a trend in these and why we might be linking them to a statement of cash flows discussion, then we will explain more fully on the idea of looking at non cash items when considering a statement of cash flows. So, some examples of non cash items would be the purchase of long term assets by issuing a note the purchase of non cash assets by issuing equity or debt, the retirement of debt by issuing equity stock, lease of assets in a capital lease transaction and exchange non cash asset for other non cash asset. Consider these examples and note some of the common features including the deal with investing and financing activities. and think through why we might be linking them to a statement of cash flows. We’ll go more fully through this by giving an example of the purchase of long term assets by issuing a note, an example that we can then apply out to the rest of these items. So what are we going to do with these non cash items, we’re going to report them at the bottom of the statement of cash flows or report them in a note related to the statement of cash flows. So we’re going to have to say in some format, or other, hey, look, these are some non cash items that we’re linking to, for some reason, the statement of cash flows.

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Statement of Cash Flow Indirect Method Change in Prepaid Expense

In this presentation, we will continue with the statement of cash flows indirect method looking at the change in prepaid expenses, we’re going to be using this information, we’ve got the comparative balance sheet, we’ve got the income statement and some additional information, we will be working primarily with the difference in the comparative balance sheet with the use of a worksheet taking this information to create this worksheet. So this is just basically a comparative balance sheet that has been condensed down to something that looks like a post closing trial balance. We are constructing our cash flows from operations from it, we have all of our differences. We’re basically just finding a home for these differences. We know if we do so that if we find a home for all of these differences, then it’ll add up to that difference, the difference in cash, which is basically the bottom line of our cash flow statement, or that’s what we want to get to in terms of adding up the cash flows. So we’ve gotten so far We’re working on the cash flows from operations. And we’ve done the cash flows in terms of the accounts receivable, inventory. Now we’re on prepaid expenses. We’re just going through these.

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Statement of Cash Flow Indirect Method Change In Accounts Receivable

In this presentation, we will continue putting together the statement of cash flows using the indirect method focusing here on the change in accounts receivable. The information will be a comparative balance sheet, the income statement and some added information we will be focusing in on a worksheet that was composed from the comparative balance sheet. So here is our worksheet. So our worksheet that we can pay that we made from the comparative balance sheet, current period, prior period change. So we have all of our balances here for the current period, the prior period and the change, we have put in this change. And this is really the column that we are focusing in on we’re trying to get to this change in cash by finding a home for all other changes. Once we find a home for all other changes. We will get to this change in cash the bottom line here 61,900. The major thing we’re looking for is right here. We’ve already taken a look at the change in the retained earnings. And the change in the accumulated depreciation. Now we’re going to look at the changes in current assets and current liabilities.

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Classification of Cash Flows

In this presentation, we will take a look at classifications of cash flows on the statement of cash flows, there’s going to be three major categories on the statement of cash flows. Those will be operating activities, investing activities, and financing activities. So our goal here, when we go through the statement of cash flow as we work through the statement of cash flows is going to be in part to decide which area these cash flows should go, should they go into operating, investing or financing. It’s going to be common questions and common problems and really just information we need to know when reading the statement of cash flows. So we’ll start off with the operating activities. We’re just going to look at the major components of the cash flows within the operating activities. So we’ll talk about inflows and outflows. Remember what we’re talking about here is cash. So when we’re talking about the statement of cash flows, we’re talking about cash flows, the cash that goes into the company, they cashed out goes out to the company. We’re going to talk about inflows and outflows here related to operating activities. Before we go into the list of inflows and outflows related to operating activities, we want to know first, that operating activities is going to be similar to us thinking about the income statement on a cash basis. So when we think about the operating activities were really thinking or one way to think about it would be that if we were to have the income statement on a cash basis, then what would the inflows and outflows be that’ll basically be what are in the operating activities when we get to the thought process in terms of how to determine operating investing and financing activities.

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