Statement of

Cash Flows
 1. Discuss the
components and
structures of a
CFS
2. Prepare a CFS
- Provides information on
the sources and
utilization of cash during
the period
Cash Flows
 Operating
- Cash inflows and
outflows are presented in
the statement of cash Investing
flows according to what
activities they have been
Financing
generated or utilized
 Indicates the amount
Operating
of money a company
brings in from its
ongoing, regular
business activities, such Investing
as manufacturing and
selling goods or
providing a service to
customer. Financing
 Indicates the result Operating
primarily from the
acquisition and
disposal of long-term
assets and other Investing
investment, like
property, plant, and
equipment. Financing
 Operating
Indicates the business
transactions involving
long-term liabilities, Investing
owners' equity, and
short-term debts
Financing
 Direct
method
Shows each major
class of gross cash
receipts and gross cash Indirect
payments method
 Direct
Adjusts accrual basis method
profit or loss for the
effects of changes in
operating assets and Indirect
liabilities and effects of method
non-cash items
 Cash inflows and outflows from investing
activities and financing activities are
reported on the basis of major classes of
gross cash receipts and gross cash
payments (similar to the direct method of
presenting cash flows from operating
activities).
Any questions?
 Classifying Transactions
Transaction Amount Activity
Purchase of Equipment Php 35,000.00 Investing
Cash received from 85,000.00 Operating
customers
Paid rent and utilities 8,300.00 Operating
Paid taxes 1,750.00 Operating
Cash paid to suppliers 12,000.00 Operating
Obtained loan 250,000.00 Financing
Sold equipment 3,500.00 Investing
Partial payment for loan 43,000.00 Financing
 Computing Transactions
Operating Activities Investing Activities Investing Activities
Cash Php Purchase of Php Obtained 250,000.00
received 85,000.00 Equipment 35,000.00 loan
from Sold (3,500.00) Partial 43,000.00
customers equipment payment for
Paid rent (8,300.00) Total (Php loan
and utilities 31,500.00) Total Php
Paid taxes (1,750.00) 207,000.00

Cash paid to (12,000.00)

suppliers
Total Php
62,950.00
 Computing Transactions
Operating Activities Investing Activities Investing Activities
Cash Php Purchase of Php Obtained 250,000.00
received 85,000.00 Equipment 35,000.00 loan
from Sold (3,500.00) Partial 43,000.00
customers equipment payment for
Paid rent (8,300.00) Total (Php loan
and utilities 31,500.00) Total Php
Paid taxes (1,750.00) 207,000.00

Cash paid to (12,000.00)

suppliers Given the computed amount for each financial sections of
the Statement of Cash Flows, assume that the beginning
Total Php cash balance is Php 81,000.00, determine the ending cash
62,950.00 balance.