managerial accounting statement of cash flows

Views:
 
     
 

Presentation Description

Statement of cash flows Direct Method

Comments

Presentation Transcript

PowerPoint Presentation:

www.parkbenchtutors.com

Managerial Accounting:

Managerial Accounting Statement of Cash Flows Direct method parkbenchtutors.com

PowerPoint Presentation:

Importance of cash flows Can the company pay all bills due and debt due at any time? Is the company generating sufficient cash? Is the company likely to be able to pay a cash dividend? Cash flow statements help answer these questions

PowerPoint Presentation:

Types of business activity Operating Activities Investing Activities Financing Activities

PowerPoint Presentation:

Operating Activities Cash received from sales Cash received as interest Cash received from dividend income Cash paid for purchases Cash paid for expenses Cash paid for taxes Cash paid as interest

PowerPoint Presentation:

Investing Activities Cash received from sales of plant and equipment Cash received from sale of land or building Cash paid to buy plant and equipment Cash paid to buy land or building Cash paid to buy business

PowerPoint Presentation:

Financing Activities Cash received from sale of bonds Cash received from line of credit Cash received from issue of common stock Cash paid out as dividends Cash paid out to retire long term debt

PowerPoint Presentation:

Two methods of calculating and preparing cash flow statement Direct method Indirect method The final answer for inflow or outflow is the same whichever method is used This podcast shows the direct method

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers Cash payments inventory Cash payment prepaid insurance Cash payment wages Cash payment taxes Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Cash Receipts from Customers Accounts receivable Start 29800 Accounts receivable End 62000 Sales 657000 Cash Collected 624800

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory Cash payment prepaid insurance Cash payment wages Cash payment taxes Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Purchases made Inventory at start 14700 Inventory at end 4700 Cost of goods sold 452000 Cost of purchases 442000

PowerPoint Presentation:

Cash Paid for Purchases Accounts payable start 14500 Accounts payable end 17600 Cost of purchases 442000 Cash Paid for Purchases 438900

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance Cash payment wages Cash payment taxes Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Prepaid insurance Prepaid at start 1700 Prepaid at end 1400 Insurance expense 16000 Cash paid for insurance 15700

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages Cash payment taxes Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Cash paid for wages Accrued wages start 5900 Accrued wages end 6500 Wages expense 45000 Cash paid for wages 44400

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages 44400 Cash payment taxes Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Receivables 62000 29800 Inventory 4700 14700 Prepaid insurance 1400 1700 Total current assets 88400 104200 Property, plant and equipment 143000 117000 Accumulated depreciation -43000 -28000 Total assets 188400 193200 Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Taxes Payable Taxes payable start 11000 Taxes payable end 12500 Tax expense 27125 Payments for taxes 25625

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages 44400 Cash payment taxes 25625 Cash Payment interest Net cash from operating activities

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages 44400 Cash payment taxes 25625 Cash Payment interest 16000 Net cash from operating activities

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages 44400 Cash payment taxes 25625 Cash Payment interest 16000 Net cash from operating activities 84175

PowerPoint Presentation:

Notes to accounts: Loom purchased 10000 Loom sold

PowerPoint Presentation:

Depreciation relating to sale Accumulated depreciation start 28000 Accumulated depreciation end 43000 Depreciation expense 17000 Accumulated depreciation sale 2000

PowerPoint Presentation:

Baa Baa Woolen Company Income statement for year ended December 31st 2012 Sales 657000 Cost of goods sold 452000 Gross profit 205000 Operating expenses Insurance 16000 Wages 45000 Depreciation 17000 Loss on sale of equipment 2500 Income from operations 124500 Interest expense 16000 Income before taxes 108500 Income taxes 27125 Net income 81375

PowerPoint Presentation:

Cash from sale equipment Original cost 10000 Accumulated depreciation 2000 Book value 8000 Loss on sale 2500 Sale 5500

PowerPoint Presentation:

Investing Activities Proceeds from sale of equipment 5500 Purchase of equipment Net cash used for investing activities

PowerPoint Presentation:

Purchase of equipment Equipment at start 117000 Equipment at end 143000 Cost of equipment sold 10000 Equipment purchased 36000

PowerPoint Presentation:

Investing Activities Proceeds from sale of equipment 5500 Purchase of equipment 36000 Net cash used for investing activities 30500

PowerPoint Presentation:

Liabilities and Equity Current Liabilities Accounts payable 17600 14500 Accrued wages 6500 5900 Taxes payable 12500 11000 Total current liabilities 36600 31400 Long term debt 60000 100000 Total liabilities 96600 131400 Stockholders equity Common stock 45000 45000 Retained earnings 46800 16800 Total stockholders equity 91800 61800 Total liabilitiex and equity 188400 193200

PowerPoint Presentation:

Financing Activities Reduction long term debt 40000 Dividends paid Net cash used in Financing

PowerPoint Presentation:

Dividends Retained earnings start 16800 Retained earnings end 46800 Net income 81375 Cash payment dividend 51375

PowerPoint Presentation:

Financing Activities Reduction long term debt 40000 Dividends paid 51375 Net cash used in Financing 91375

PowerPoint Presentation:

Statement of cash flow direct method December 31st 2012 Operating activities Cash receipts from customers 624800 Cash payments inventory 438900 Cash payment prepaid insurance 15700 Cash payment wages 44400 Cash payment taxes 25625 Cash Payment interest 16000 Net cash from operating activities 84175 Investing Activities Proceeds from sale of equipment 5500 Purchase of equipment 36000 Net cash used for investing activities 30500 Financing Activities Reduction long term debt 40000 Dividends paid 51375 Net cash used in Financing 91375 Net increase / decrease cash during year -37700

PowerPoint Presentation:

Net increase / decrease cash during year -37700 Cash at start of year 58000 Cash at end of year 20300 Balance Sheet December 31st 2012 2012 2011 Assets Current Assets Cash 20300 58000 Check results

PowerPoint Presentation:

facebook.com/david.hopcoft.9 parkbenchtutors.com Narrated by David Hopcroft

authorStream Live Help