DELOPMENT OF STATEMENT OF

CASH FLOWS
Direct Method
Indirect Method

DIRECT METHOD
Cash flows from operating activities:
Cash received from the customers

10,20,000

Cash paid for the goods and services

(9,55,000)
Interest and dividend received
21,000
Interest taxes paid
(26,000)
Net cash provided by operating activities
60,000
Cash flows from investing activities:
Sale proceeds of property, etc.
1,26,500
Collection of loans
3,15,000
Purchase of plant and equipment
(4,65,000)
Purchase of securities of other companies
(48,000)
Net cash used in financing activities
(71,500)

Cash flows from financing activities:

Reimbursement of loans & advances
(56,000)
Receipts from issue of Long term notes
80,000
Cash from Issuance of shares
1,35,000
Dividend paid
(85,000)
Purchase of own shares
(39,000)
Net cash provided by financing activities
35,000
Net increase in cash and cash equivalents
23,500
Cash and cash equivalents at the beginning of period 26,500
Cash and cash equivalent at the end of period
50,000

Reconciliation of net income to net cash provided by the

operating activities:
Net income 26,500
Accumulated depreciation
16,000
Loss on sale of asset
14,000
Profit on sale of asset
(12,500)
Increase in current assets other than cash & equivalent
(21,500)
Decrease in current assets other than cash & equivalent
34,000
Increase in current liabilities
12,600
Decrease in current liabilities
(9,100)
Net cash provided by operating activities
60,000