Comes right from the income statement.
Depreciation and amortization are subtracted to achieve net income, so to eliminate their non-cash effects on
the income statement, we add them back here.
Gain on sale from the income statement is subtracted here since we actually want it to appear below in the "investing" section instead.
The following rules are applied to changes in the current asset and current liability accounts:
ADD: Decreases in Current Assets
SUBTRACT: Increases in Current Assets
ADD: Increases in Current Liabilities
SUBTRACT: Decreases in Current Liabilities
Net income + Depreciation + Amortization - Gains + Decreases in CA and Increases in CL - Increases in CA and Decreases in CL = Net Cash Flows from Operating Activities.
Investments are calculated by finding the change amount in the investments account then adding the gain on investments from the income statement to find the total amount of cash received from the sale of investments.
Land is sold at cost, so that’s the amount of cash received. This information is in the instructions. The middle cell across from land is for the subtotal of the investments and land.
Cash paid for the construction of the building is also given in the instructions.
Cash from investments + Cash from sale of land - cash paid for construction of building = Net Cash Flows from Investing Activities
Cash received from mortgage note payable is given in the instructions.
Cash paid for dividends is calculated like this: Dividends Declared (given in instructions) - Increase in Dividends Payable account.
Cash received from Mortgage note payable less cash paid for dividends = Net Cash Flow Used for Financing Activities
Increase in cash is calculated as Net CF from Op + Net CF from Investing (or - if its negative) + Net CF from Financing (or - if its negative).
Cash at beginning of the year comes from the balance sheet information. Year 20WW is beginning of year, 20XX is end of year.
Comes from balance as of 20XX. Should also tie out as "Increase in cash + Beginning Cash Balance".
Common stock was issued in exchange for settling the bond liability. Remember, when stock is sold "at 40"
you will multiply the number of shares sold by the sell price to get the dollar amount settled.
Example: If I sell 100 shares at 10, the total amount of cash received is 1,000. (100 x 10).
Attachment:- ACC MODULE 1.xlsx
Attachment:- ACC MODULE 2.xlsx