財務會計學英文課件：ch11 The Statement of Cash Flows

1、Chapter 11The Statement of Cash FlowsIdentify the purposes of the statement of cash flows2Copyright 2014 Pearson Education. Timing of the Financial StatementsCopyright 2014 Pearson Education. 312-31-10 (a point in time)Balance SheetFor the year ended 12-31-11(a period of time)Income StatementBalance

2、 SheetStatement of Changes in EquityStatement of Cash Flows12-31-11 (a point in time)Balance SheetPurposes of Cash Flow StatementsCopyright 2014 Pearson Education. 4Predicts future cash flowsEvaluates management decisionsShows relations of net income to cash flowsDistinguish among operating, investi

3、ng and financing cash flows5Copyright 2 010 Pearson Education Inc. Publishing as Prentice Hall. Cash Flow CategoriesOperating Create revenue, expenses, gains and lossesInvesting Relate to non-current assetsFinancing Obtain cash from and pay cash to investors and creditors6Copyright 2014 Pearson Educ

4、ation. Cash Flow Categories7Copyright 2014 Pearson Education. Collections from customersReceipts of interests & dividendsSale of short-term investmentsOther operating receiptsSale of PPESale of long-term investmentsCollections of loans from othersIssuance of sharesSale of treasury sharesProceeds

5、 from loans & borrowingsPayment to suppliersPayments to employeesPayments of interest & income taxPurchase of short-term investmentsAcquisition of PPEPurchase of long-term investmentsMaking loans to othersRepurchase of sharesPurchase of treasury sharesPayment of debt principalOther operating

6、 paymentsPayment of dividendOperating ActivitiesInvesting ActivitiesFinancing ActivitiesExercise 12-16ACopyright 2014 Pearson Education. 8ASale of long-term investmentBIssuance of long-term note payable to borrow cashCIncrease in prepaid expensesDPayment of cash dividendELoss on sale of equipmentFDe

7、crease in merchandise inventoryGAcquisition of equipment by issuance of a note payableHIncrease in accounts payableIAmortization of intangible assetsJNet incomeI+F+O+NO+O+O+O+F-O-Exercise 12-16ACopyright 2014 Pearson Education. 9KPayment of long-term debtLAccrual of salary expenseMCash sale of landN

8、Purchase of long-term investmentOAcquisition of building by cash paymentPPurchase of treasury sharesQIssuance of share capital for cashRDecrease in accrued liabilitiesSDepreciation of equipmentF-NF-F+O-O+I-I -I+Relationship to Balance SheetCopyright 2014 Pearson Education. 10Current assetsCurrent li

9、abilitiesLong-term assetsLong-term liabilitiesOwners equityOperating cash flowsOperating cash flowsFinancing cash flowsInvesting cash flowsFormats for Cash Flow StatementCopyright 2014 Pearson Education. 11 Reconciles from net income to cash provided by operating activitiesIndirect Reports all cash

10、receipts and cash payments from operating activitiesDirectPrepare cash flows from operating activities by the indirect method12Copyright 2014 Pearson Education. Operating ActivitiesCopyright 2014 Pearson Education. 13Net IncomeDepreciation, Depletion & AmortizationGains on sales of long-term ass

11、etsLosses on sales of long-term assetsIncreases in current assetsDecreases in current liabilitiesDecreases in current assetsIncreases in current liabilitiesCash Flow Template: OperatingCopyright 2014 Pearson Education. 14Cash Flows From Operating ActivitiesNet incomeAdjustments to reconcile net inco

12、me to net cash provided by operating activities:+Depreciation/depletion/amortization expense+Loss on sale of long-term assets-Gain on sale of long-term assets-Increases in current assets other than cash+Decreases in current assets other than cash+Increases in current liabilities-Decreases in current

13、 liabilities=Net cash provided by operating activitiesUnderstanding Reconciliation of Net Income to CFO15Copyright 2014 Pearson Education. Depreciation, Depletion, and Amortization Expenses Depreciation has no effect on cash, but decreases net income. Add-back cancels the earlier deduction Gains and

14、 Losses on Sale of Long-term AssetsPrepare cash flows from investing activities16Copyright 2014 Pearson Education. Cash Flow Template: InvestingCopyright 2014 Pearson Education. 17Cash Flows from Investing Activities+Sales of long-term assets-Purchases of long-term assets+Collections of notes receiv

15、able-Loans to others=Net cash provided by (used for) investing activitiesComputing Purchases and Sales of PPECopyright 2014 Pearson Education. 18PPE, NetBeginning balance+ Acquisitions-Depreciation-Book value of assets sold=Ending BalanceSale proceeds=Book value of assets sold+Gain-LossCopyright 201

16、4 Pearson Education. 19PPE, NetBeginning balanceAcquisitionsDepreciationBook value of assets soldEnding balanceComputing Purchases and Sales of InvestmentsCopyright 2014 Pearson Education. 20InvestmentsBeginning balance+ Purchases-Book value of investments sold=Ending BalanceInvestmentsBeginning bal

17、ancePurchasesBook value of investments soldEnding balanceLoans and CollectionsCopyright 2014 Pearson Education. 21Notes ReceivableBeginning balance+ New Loans made-Collections=Ending BalanceNotes ReceivableBeginning balanceNew loans madeCollectionsEnding balancePrepare cash flows from financing acti

18、vities22Copyright 2014 Pearson Education. Cash Flow Template: FinancingCopyright 2014 Pearson Education. 23Cash Flows from Financing Activities+Issuance of shares-Purchase of treasury shares+ Borrowing-Payment of notes and bonds payable- Payment of dividendsNet cash provided by (used in) financing a

19、ctivitiesComputing Issuance and Payments of Long-Term DebtCopyright 2014 Pearson Education. 24Long-Term Debt (Notes payable, Bonds payable)Beginning balance+ Issuance of new debt-Payment of debt=Ending BalanceLong-Term DebtBeginning balancePayments of debtIssuance of new debtEnding balanceComputing

20、Issuance of Shares and Purchases of Treasury SharesCopyright 2014 Pearson Education. 25Share CapitalBeginning balance+ Issuance of new shares=Ending BalanceShare CapitalBeginning balanceIssuance of new sharesEnding balanceTreasury ShareBeginning balance+ Purchase of treasury shares=Ending BalanceTre

21、asury ShareBeginning balanceEnding balancePurchase of treasury shareComputing DividendsCopyright 2014 Pearson Education. 26Retained EarningsBeginning balance+ Net income-Dividends declared=Ending BalanceRetained EarningsBeginning balanceDividends declaredNet incomeEnding balanceNoncash Investing and

22、 Financing ActivitiesCopyright 2014 Pearson Education. 27Noncash investing and financing activities: Acquisition of building by issuing shares$ Acquisition of land by issuing note payable$ Payment of long-term debt by issuing shares$Total noncash investing and financing activities$Exercise 12-20ACop

23、yright 2014 Pearson Education. 28December 31,20102009Current assets: Cash$30,000$10,800 Accounts receivable42,00059,000 Inventory30,00091,000 Prepaid expenses9,4008,700Current liabilities: Accounts payable$38,000$27,000 Accrued liabilities18,00099,000Exercise 12-20ACopyright 2014 Pearson Education.

24、29December 31,20102009Current assets: Change Cash$30,000$10,800$19,200 Accounts receivable42,00059,000(17,000) Inventory30,00091,000(61,000) Prepaid expenses9,4008,700700Current liabilities: Accounts payable$38,000$27,00011,000 Accrued liabilities18,00099,000(81,000)Exercise 12-20ACopyright 2014 Pea

25、rson Education. 30Cash Flows From Operating ActivitiesNet income$68,900Adjustments to reconcile net income to net cash provided by operating activities:+ Depreciation expense26,000+ Decrease in accounts receivable17,000+ Decrease in inventory61,000- Increase in prepaid expenses(700)+ Increase in acc

26、ounts payable11,000- Decrease in accrued liabilities(81,000)= Net cash provided by operating activities$102,200Exercise 12-20ACopyright 2014 Pearson Education. 31Cash Flows from Investing Activities+ Sales of land27,000- Purchases of PPE(160,000)= Net cash used for investing activities($133,000)Cash

27、 Flows from Financing Activities+ Issuance of share capital80,000- Payment of note payable(17,000)- Payment of dividends(13,000)= Net cash provided by financing activities$50,000Exercise 12-20ACopyright 2014 Pearson Education. 32Cash Flows from Investing Activities+ Sales of land27,000- Purchases of

28、 PPE(160,000)= Net cash used for investing activities(133,000)Cash Flows from Financing Activities+ Issuance of share capital80,000- Payment of note payable(17,000)- Payment of dividends(13,000)= Net cash provided by financing activities50,000Net increase in cash$19,200Cash balance, December 31, 200

29、910,800Cash balance, December 31, 2010$30,000Net cash provided by operating activities102,200Prepare cash flows from operating activities using the direct method33Copyright 2014 Pearson Education. The Direct Method Preferred by the International Accounting Standards Board Provides clearer informatio

30、n about the sources and uses of cash Used by very few companies Takes more computations34Copyright 2014 Pearson Education. Operating Cash Flows: Direct Method Receipts: Collections from customers Interest and dividends Payments To suppliers To employees For interest and income taxes35Copyright 2014

31、Pearson Education. Computing Operating Cash FlowsCopyright 2014 Pearson Education. 36ReceiptsIncome Statement AccountBalance Sheet AccountFrom CustomersSales revenue+ Decrease in Accounts Receivable- Increase in Accounts ReceivableOf interestInterest revenue+ Decrease in Interest Receivable- Increase in Interest ReceivableComputing Operating Cash FlowsCopyright 2014 Pearson Education. 37PaymentsIncome Statement AccountBalance Sheet AccountTo s