Fin 200 Week 1 Assignment

Topics: Cash flow statement, Income statement, Generally Accepted Accounting Principles Pages: 2 (276 words) Published: September 14, 2012
Cash Flow Preparation

27) Cash Flow Preparation
Income Statement for the Year Ending December 31, 2008

Cash flows from operating activities:
Net income: $160.000
Adjustments to cash flow from operating activities
Depreciation (re-added) $150,000
Increase in inventory $20,000
Decrease in already paid expenses ($20,000)
Increase in accounts payable $210,000
Decrease in accrued expenses $20,000
Total adjustments $380,000
Net cash flow from operating activities $160,000

Cash flows from investing activities:
Increase in investments ($10,000)
Increase in plant and equipment $400,000
Net cash flow from investing $390,000

Cash flow from financing activities:
Increase in bonds payable $50,000
Preferred stock dividends paid $10,000
Common stock paid $120,000
Net cash flow from financing activities $180,000

Net increase in cash flow is $20,000

28.) The relationship between net income and net cash flows from operating activities for the company is that, the net income is the basic in which the company can use is a direct method. The items on the income statement are adjusted to cash accounting. The net income shows where it starts and the adjustments are made to change net income to cash flow from operations.

29.) The plant and equipment have been financed in a good way due to the way the company created excess funds from operating activities that they in turn utilized for the investing activities and in some areas of the financing activities. Due to the way that the company created the excess funds, there is a $20,000 increase in the cash flow balance; this can also be checked against the cash balance.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • FIN 534 Quiz 1 Week 1 Essay
  • Essay on fin week 5 assignment
  • FIN 550 Discussion Questions Week 1 11 1 Essay
  • FIN 534 Discussion Questions Week 1 11 1 Essay
  • Essay about FIN 370 Week 1 – 5 ALL WRITTEN ASSIGNMENTS
  • Assignment 1 Week 1 Research Paper
  • Devry Keller Graduate School FIN 515 Week 1 Assignment Paper
  • ACC 206 week 1 assignment Essay

Become a StudyMode Member

Sign Up - It's Free