Chatper 17 statement of cash flows

usefulness of the statement if cash flows

1. ability to generate future cash flows

2. ability to pay dividends and meet obligations

3. The reason for the difference between net income and net cash provided by operating activities

4. cash investing and financing transactions during the period

operating activities

1. net income

2. depreciation

3. A/R (increase)

4. Inventory (increase)

5. prepaid expenses (increase)

6. A/P (decrease

7. accrued liabilities (decrease)

8. Income taxes payable (decrease)

   loss on disposal of plant assets

investing activities

1. Acquisition of plant assets

2. proceeds from the sale of land

3. proceeds from the sale of equipment

4. sale of investments

financing activities

1. proceeds from issuing common stock

2. retirement of bonds

3. proceeds from notes payable

4. payment of notes payable

5. payment of dividends

6. purchase of treasury stock

7. proceeds from issuing bonds

significant noncash activities

1. direct issuance of common stock to purchase assets

2. Conversion of bonds into common stock

3. direct issuance of debt to purchase assets

4. exchange of plant assets