EX5-1

1. Calculate cash flow from operations using the indirect method:

Net income
Depreciation
Gain on sale of old machine
Increase in Accounts Receivable
Decrease in Inventory
Increase in Accounts Payable
Increase in Interest payable
Cash flow from operations

Calculate cash flow from operations using the direct method:

Cash received from customers
Cash received from returns on loans ( interest) and on equity securities ( dividend):
Cash payment for mechandise
Cash payment for operating expenses
Cash payment for interest expense
Cash payment for income taxes
Cash flow from operations

2. Cash collections, cash paid to suppliers, and other cash expenses

Cash collections= Sales - Increase in Receivables
Cash paid to suppliers= Cost of goods sold - Decrease in Inventory - Decrease in Account Payable
Other cash expense= Interest Expense - Interest Payable + Taxes

3. Calculate cash flow from fiancing, cash flow from investing, and total cash flow
Cash flow from fiancing :
Cash received from sale of common stock
Cash paid for mortgage
Borrowing bank notes
Cash paid for dividends
Total

Cash flow from investing

Cash from sale of fixed assets
Cash paid to purchase fixed assets
Total

Total Cash flow= CFO + CFF + CFI

Unit: US$

60
100
(10)
(50)
60
20
5
185

1,375
0
-1,120
0
-25
-45
185

1,375
1,120
70

30
-50
100
-5
75

30
-100
-70

190
EX5-2
HYATT CORPORATION
Cash Flow Statement
For the Year Ended December 31, 2012
2. DIRECT METHOD Unit: $1,000
Cash flows from operating activities
Cash received from customers 1,375
Cash payment for mechandise -1,120
Cash payment for operating expenses 0
Cash payment for interest expense -25
Cash payment for income taxes -45
Total 185
Cash flows from financing activities
Cash from sale of fixed assets 30
Cash paid for purchase of fixed assets -100
Total -70
Cash flows from investing activities
Cash received from sale of common stocks 30
Cash received from issuance of bank note 100
Cash paid for mortgage -50
Cash paid for dividends -5
Total 75
Increase in cash 190
Cash at the beginning of the year 100
Cash at the end of the year 290

3.
Accrual Basis
Sales 1,425
Cost of merchandise sold 1,200

Operating expenses:
Depreciation expense 100
Gain on sale of land -10
Interest expense 30
Income tax expense 45
Total expense 1,365
Net income 60
From the recently calcution, we can see that the net income < net cash flow from the operation
185-60= 125 so net cash is lager than net income 125
 Add Cash
Adjustment
(subtract) basis
Increase in A/R ( minus) -50 1,375
Decrease in Inventory( minus) -60 1,120
Increase in A/P (plus) -20

N/A
N/A
Increase in Interest Payable -5 25
No income tax payable 45
1,190
185
ash flow from the operation
 HYATT CORPORATION
Cash Flow Statement
For the Year Ended December 31, 2012
1.INDIRECT METHOD Unit: $1,000
Cash flows from operating activities
Net income (loss) 60
Depreciation of fixed assets 100
Gain on disposal of assets -10
Increase in Account Receivables -50
Decrease in Inventories 60
Increase in Account Payable 20
Increase in Interest Payable 5
Total 185
Cash flows from financing activities
Cash received from sales of fixed assets 30
Cash paid from purchase of fixed assets -100
Total -70
Cash flows from investing activities
Cash received from sales of common stock 30
Cash received from issuance of bank note 100
Cash paid from mortgage -50
Cash paid from dividends -5
Total 75
Increase in cash 190
Cash at the beginning of the year 100
Cash at the end of the year 290