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Love Thy Pets Inc,. Statement of Cash Flows For the Year Ended, December 31, 2011 Cash flows from operating activities: Cash receipts from operating activities $XX,XXX Cash payments from operating activities (XX,XXX) Net cash provided by operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment Purchase of investment Sale of investment Net cash used by investing activities Cash flows from financing activities: Issuance of common stock Issuance of note or bonds payable Payment of dividends Redemption of bonds Purchase of treasury stock Net cash provided by financing activities Net increase (decrease) in cash Cash at beginning of period Cash at end of period
$XX,XXX
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For a presentation on the topic of Cash Flows Statement-Direct Method go to this web-link: http://prezi.com/vopd12nirah2/cash-flows-statement-direct-method/
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3. Now, place the title Cash payments for operating activities on the next line. This dollar amount will include all cash payment made over the fiscal period. There are a number of formulas used to calculate this dollar amount. Add the results from these formulas to provide a dollar amount for the statement. This amount will have brackets because the amount decreases cash flow from operating activities. The Formulas: a. Cash Payments to Supplies = Cost of Goods Sold Plus increase in inventory decrease in accounts payable Minus decrease in inventory increase in accounts payable
b. Cash payments for operating expenses = Operating expenses Plus Minus increase in prepaid expenses decreases in prepaid expenses decreases in accrued expenses payable increases in accrued expenses payable Any depreciation, amortization, or depletion that was included in the operating expenses.
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c. Cash payments for interest = Interest expense Plus decrease in interest payable Minus increase in interest payable
d. Cash payments for income taxes = Income tax expense Plus decreases in income taxes payable Minus increases in income taxes payable
4. On the last line of this section, place the title Net cash provided by operating activities. Subtract cash payments from operating activities from cash receipts from operating activities and place the results in the right column.
Place the dollar amounts in the middle column. Any items in the minus column of the above chart will have brackets surrounding their dollar amounts. 3. Finally, for this section total the entire sales minus all of the purchases to get the results of this section. Place the title Net cash provided by investing activities if the result is positive or if the result is negative use the title Net cash used by investing activities. The resulting dollar amount is place in the right column.
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3. Finally, for this section total all of the sales minus all of the purchases, redemptions, and payments to get the results of this section. Use the title Net cash provided by financing activities if the result is positive or if the result is negative use the title Net cash used by financing activities. Place the title in the left column. The resulting dollar amount is place in the right column.
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