Escolar Documentos
Profissional Documentos
Cultura Documentos
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CASH INFLOWS
Operating Activities Investing Activities Financing Activities
Sale of operational assets Issuance of stock
Cash received Sale of investments Issuance of bonds
from revenues Collections of loans and notes
Business
CASH OUTFLOWS
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Operating Activities
Noncash Investing
and Financing
Activities 21-7
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Inflows from:
Sales to customers.
Interest and dividends
received. + Cash
Flows
Outflows to: from
Purchase of inventory. Operating
Salaries, wages, and other Activities
operating expenses.
_
Interest on debt.
Income taxes.
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Inflows from:
Sale of long-term assets used in
the business.
Sale of investment securities
(stocks and bonds). + Cash
Collection of nontrade
receivables. Flows
from
Outflows to: Investing
Purchase of long-term assets
used in the business. _ Activities
Purchase of investment
securities (stocks and bonds).
Loans to other entities.
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Slide 14
Inflows from:
Sale of shares to owners.
Borrowing from creditors
+ Cash
through notes, loans,
mortgages, and bonds. Flows
from
Outflows to: Financing
Owners in the form of dividends
or other distributions.
_ Activities
Owners for the reacquisition of
shares previously sold.
Creditors as repayment of the
principal amounts of debt.
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Expenses:
Cost of good sold (60)
Salaries expense (13)
Depreciation expense (3)
Bond interest expense (5)
Insurance expense (7)
Loss on sale of equipment (2)
Income tax expense (9)
Net income 12
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Changes Slide 21
Dec. 31, Dec. 31,
2008 Debits Credits 2009
Cash Flow Statement
Operating Activities: Next we
allocate space
on the
spreadsheet
for the
statement of
cash flows.
Investing Activities:
Financing Activities:
Financing Activities:
Short-term Investments
Beg. bal. 0
Purchases 12
End. bal. 12
Now, let’s look
at a noncash
transaction. 21-27
UNITED BRANDS CORPORATION Slide 28
Spreadsheet for the Cash Flow Statement
Changes
Dec. 31, Dec. 31,
2008 Debits Credits 2009 In entry number 14,
Balance Sheet we find that a note
Assets:
Cash 20 29 payable was issued
Accounts receivable 30 (1) 2 32 as payment for a
Short-term investments - (12) 12 12
Inventory 50 46 building.
Prepaid insurance 6 3
Land 60 80 Investing in a new
Buildings and equipment 75 (14) 20x 81 building is a
Less: Accumulated depreciation (20) (16)
221 267 significant investing
Liabilities: activity and
Accounts payable 20 26
Salaries payable 1 3
financing the
Income tax payable 8 6 acquisition with
Notes payable - (14) 20x 20
Bonds payable 50 35
long-term debt is a
Less: Discount on bonds payable (3) (1) significant financing
activity.
Shareholders' Equity:
Common stock 100
130
Paid-in capital 20
29
Retained earnings 25
19
x denotes a noncash transaction 221 267 21-28
UNITED BRANDS CORPORATION Slide 29
Spreadsheet for the Cash Flow Statement
Changes
Dec. 31, Dec. 31, After entering all
Balance Sheet
2008 Debits Credits 2009
the transactions,
Assets: this is what the
Cash 20 (19) 9 29
Accounts receivable 30 (1) 2 32 balance sheet
Short-term investments - (12) 12 12
Inventory 50 (4) 4 46 portion of the
Prepaid insurance
Land
6
60 (13)
(8)
30 (3)
3
10
3
80
spreadsheet looks
Buildings and equipment 75 (14) 20x (9) 14 81 like.
Less: Accumulated depreciation (20) (9) 7 (6) 3 (16)
221 267
Liabilities:
Accounts payable 20 (4) 6 26
Salaries payable 1 (5) 2 3
Income tax payable 8 (10) 2 6
Notes payable - (14) 20x 20
Bonds payable 50 (15) 15 35
Less: Discount on bonds payable (3) (7) 2 (1)
Shareholders' Equity:
Common stock 100 (16) 10
(17) 20 130
Paid-in capital 20 (16) 3
(17) 6 29
Retained earnings 25 (16) 13
(18) 5 (11) 12 19
221 267 21-29
Slide 30
Changes
Dec. 31, Dec. 31,
2008 Debits Credits 2009
Income Statement
Revenues:
Sales revenue (1) 100 100
Investment revenue (2) 3 3
Gain on sale of land (3) 8 8
Expenses:
Cost of good sold (4) 60 (60)
Salaries expense (5) 13 (13)
Depreciation expense (6) 3 (3)
Bond interest expense (7) 5 (5)
Insurance expense (8) 7 (7)
Loss on sale of equipment (9) 2 (2)
Income tax expense (10) 9 (9)
Net income (11) 12 12
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UNITED BRANDS CORPORATION Slide 32
Cash Flow Statement
For the Year Ended December 31, 2009
($ in millions)
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Slide 37
A spreadsheet is
equally useful in
preparing a
statement of cash
flows whether we use
the direct or the
indirect method of
determining cash
flows from operating
activities.
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Slide 38
The T-Account
method serves the
same purpose as a
spreadsheet in
assisting in the
preparation of a
statement of Cash
Flows.
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