CORPORATE FINANCIAL REPORTING
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Transcript of CORPORATE FINANCIAL REPORTING
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CORPORATE FINANCIAL REPORTING
Cash Flow Statement
Long-Lived Assets
CASH FLOW STATEMENTOperating activities xxxx
Investing activities xxxx
Financing activities xxxx
Increase (decrease) in cash xxxxCash, beginning of the year xxxCash, end of the year xxxx
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CASH FLOW STATEMENTOperating activities normal day-to-day income producing activities (including buying/selling Trading Securities)
Investing activities acquiring/disposing of non-current assets (including buying/selling Securities Available For Sale) lending and being repaid the principle
Financing activities borrowing and repaying the principle amount borrowed all cash transactions with shareholders 3Cash Flow Statement
CASH FLOW STATEMENT
Companies don’t really prepare cash flow
statements like we did the first day of class.
They use, as much as possible, a logic based approach.
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CASH FLOW STATEMENTSuppose you saw the following under ASSET on a company’s balance sheet:
(in $ 000) 2010 2009
Land 10,000 4,000
and under LIABILITIES there were noliabilities for a land purchase.
What would you surmise happened?5Cash Flow Statement
CASH FLOW STATEMENTSuppose you saw the following under ASSETS on a company’s balance sheet: (in $ 000)
2010 2009 Land 10,000 4,000
and under LIABILITIES there was: 2010 2009
Mortgage payable for land 5,000 -0-
What would you surmise happened?6Cash Flow Statement
CASH FLOW STATEMENTSuppose you saw the following under ASSETS
on a company’s balance sheet: (in $ 000) 2010 2009
Land 10,000 24,000
and there is no loss from land impairment on the 2020 income statement.
What would you surmise happened?7Cash Flow Statement
CASH FLOW STATEMENTSuppose you saw the following under ASSETS on a company’s balance sheet: (in $ 000)
2010 2009Land 10,000 24,000Nothing about a receivable from sale of land.
And on the 2010 income statement you sawGain on land sale 5,000 -
What would you surmise happened?8Cash Flow Statement
CASH FLOW STATEMENTSuppose you saw the following under ASSETS on a company’s balance sheet: (in $ 000)
2010 2009Land 10,000 24,000
And on the 2010 income statement you sawImpairment of land (14,000) -
What would you surmise happened?
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CASH FLOW STATEMENTSuppose you saw the following under OWNERS’ EQUITY on a company’s balance sheet: (in $ 000)
2010 2009 Capital stock 10,000 7,000 Paid in surplus 14,000 9,000
What would you surmise happened?
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CASH FLOW STATEMENT
For the most part, that is the approach companies take to
prepare cash flow statements.
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CASH FLOW STATEMENT
Warning!
Accounting professors love to put cash flow statement problems on
tests.
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CASH FLOW STATEMENT
QUESTIONS?
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