Hbr – Cash Flow Stattement – Chemalite.

 Exercises Classification of Cash Flows
For each event listed below, select the appropriate category which describes the effect of the event on a statement of cash flows:a. Cash provided/used by operating activities.
b. Cash provided/used by investing activities.
c. Cash provided/used by financing activities.
d. Not a cash flow. C/APayment on long-term debt (company pays INTEREST only) – think about this how this could be both – related to debt because financing and operating because it’s part of operations C
Issuance of bonds at a premium A
Collection of accounts receivable D
Cash dividends declared – it’s not a cash flow D
Issuance of shares to acquire land (“exchange” of shares for land) – no cash exchanges here B
Sale of marketable securities (long-term) – A
Payment of employees’ wages C
Issuance of common shares for cash A/?
Payment of income taxes payable – could be the disposition of property, etc. then this will fall under-investing B
Purchase of equipment B
Purchase of common shares in another company B
Sale of real estate held as a long-term investmentTransactions Transaction
Journal Entry
Impact on earnings
Impact on cash flows
Cash flow classification
Adjustment Issue 1,000 shares for $10,000
Dr. cash (BS) 10K Cr. Common shares 10K
INFLOW of 10k
FinancingIntroduction to Cash Flow construction The Controller of Schmidt Tooling Corporation has provided you with the following information: Schmidt Tooling Corporation| Income Statement| For the Year Ended December 31, 2010.Net Sales
620,000Operating expenses
410,000Income from operations
210,000Gain on sale of equipment
30,000Interest expense
8,000Income before income taxes
232,000Income taxes
92,800Net income
139,200Comparative Account Information. Relating to Operations.For the Year Ended December 31, 2010
2010
2009Accounts receivable
56,000
40,000Prepaid insurance
5,000
6,000Accounts payable
59,000
47,000Interest payable
600
1,500Income taxes payable
4,200
6,000Unearned revenue
20,000
14,000 Instructions: Prepare a statement of cash flows (for the company’s operating activities only) for the year ended December 31, 2010, using the indirect format.
Approximate price: $22
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