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    Operating Cash Inflows: Income Statement Items

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    KBS
    The document describes the main categories of cash flows for a company - operating, investing, and financing activities. It lists common cash inflows and outflows for each category, such as cash inflows from sales for operating activities and cash outflows to purchase new equipment for investing activities. The categories are useful for analyzing the sources and uses of cash for a company over a given period.

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    Operating Cash Inflows: Income Statement Items

    Uploaded by

    KBS
    36 views2 pages
    The document describes the main categories of cash flows for a company - operating, investing, and financing activities. It lists common cash inflows and outflows for each category, such as cash inflows from sales for operating activities and cash outflows to purchase new equipment for investing activities. The categories are useful for analyzing the sources and uses of cash for a company over a given period.

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    cash flow

    Original Title

    Cash Flow

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    The document describes the main categories of cash flows for a company - operating, investing, and financing activities. It lists common cash inflows and outflows for each category, such as cash inflows from sales for operating activities and cash outflows to purchase new equipment for investing activities. The categories are useful for analyzing the sources and uses of cash for a company over a given period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views2 pages

    Operating Cash Inflows: Income Statement Items

    Uploaded by

    KBS
    The document describes the main categories of cash flows for a company - operating, investing, and financing activities. It lists common cash inflows and outflows for each category, such as cash inflows from sales for operating activities and cash outflows to purchase new equipment for investing activities. The categories are useful for analyzing the sources and uses of cash for a company over a given period.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Operating

    Cash inflows
    From sales of goods or services.
    From returns on loans (interest) and on equity
    securities (dividends). Income
    Cash outflows Statement
    To suppliers for inventory. Items
    To employees for services.
    To government for taxes.
    To lenders for interest.
    To others for expenses.

    Investing
    Cash inflows
    From sale of property, plant, and equipment.
    From sale of debt or equity securities of other entities. Generally
    From collection of principal on loans to other entities. Long-Term
    Cash outflows Asset Items
    To purchase property, plant, and equipment.
    To purchase debt or equity securities of other entities.
    To make loans to other entities.

    Financing
    Cash inflows Generally
    From sale of equity securities. Long-Term
    From issuance of debt (bonds and notes). Liability
    Cash outflows and Equity
    To shareholders as dividends. Items
    To redeem long-term debt or reacquire share capital.
    Dublin Enterprises, Inc. (DEI), owns a chain of retail electronics stores located in shopping
    malls. The following are the company’s 2016 income statement and comparative balance
    sheets ($ in millions):
    Concept Review Exercise
    Income Statement
    For the Year Ended December 31, 2016
    Revenue $2,100
    Cost of goods sold 1,400
    Gross profit 700
    Operating expenses:
    Selling and administrative $ 355
    Depreciation 85
    Total operating expenses 440
    Income before income taxes 260
    Income tax expense 78
    Net income $ 182

    Comparative Balance Sheets 12/31/16 12/31/15 Change


    Assets:
    Cash $ 300 $ 220
    Accounts receivable (net) 227 240
    Inventory 160 120
    Property, plant, and equipment 960 800
    Less: Accumulated depreciation (405) (320)
    Net Property Plant and Equipment 555 480
    Total assets $ 1,242 $1,060
    Liabilities and shareholders’ equity:
    Accounts payable $ 145 $ 130
    Payables for selling and admin. Expenses 147 170
    Income taxes payable 95 50
    Long-term debt –0– 100
    Common stock 463 400
    Retained earnings 392 210
    Total liabilities and shareholders’ equity $1,242 $1,060

    Required:
    1. Prepare DEI’s 2016 statement of cash flows using the direct method.
    2. Prepare the cash flows from operating activities section of DEI’s 2016 statement of cash flows
    using the indirect method.

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