Statement of Cash Flows Flashcards
primary purpose of a statement of cash flows
provide relevant information about the cash receipts and cash disbursements of an enterprise during a period
common stock purchase is categorized in
investing activities
dividend received is categorized in
operating activities
decrease in the unamortized bond discount balance
represents interest expense incurred in the current period that wasn’t a result of a cash disbursement; and is therefore added to net income.
purchase of commercial paper maturing in 60 days is reported in which activity
the purchase of commercial paper maturing in 60 days is an exchange of one cash equivalent, cash, for another, a highly liquid instrument with an original maturity of 3 months or less. As a result, there is no inflow or outflow of cash or cash equivalents and the transaction would not be reported in the statement of cash flows.
Proceeds received from sale of bonds
financing
interest paid
Under the indirect method, the amount of interest paid must be disclosed in a supplementary schedule.
Amortization of bond premium
operating
Amortization of bond premium reduces interest expense without reducing the amount of cash paid for interest. Under the indirect method, premium amortization is deducted from net income in calculating cash flows from operating activities.
Gain on early extinguishment of debt
operating
The amount paid to retire debt, including any loss and net of any gain, is considered a cash outflow for financing activities.
A gain on early extinguishment is included in net income but is not a cash inflow from operating activities. Under the indirect method, the gain is deducted from net income in calculating cash flows from operating activities.
dividend received
operating
cash proceed from sale of HTM investment
investing
acquired avail for sale investment
investing
disposal of factory equipment
investing
collect sales from customer
operating
cash payment for COGS and SGA
operating
interest received
operating
