14. Classification of Cash Inflows and Cash Outflows

18. Cash-Generating Efficiency (CGE) (cont’d) 2. Cash Flows to Sales 3. Cash Flows to Assets Shows how much of net sales actually results in cash inflows Shows how much cash is being generated by operations for each dollar of assets

22. Indirect Method of Determining Net Cash Flows from Operating Activities

24. Adjustments to Depreciation 37,000 37,000 Depreciation Expense Income Taxes Payable Cash

25. Adjustments to Depreciation 37,000 37,000 Depreciation Expense Accumulated Depreciation Cash

27. Adjustments to Gains and Losses 90,000 -0- 90,000 12,000 102,000 Gain on Sale - Investments Investments Cash

28. Adjustments to Gains and Losses 90,000 -0- 90,000 12,000 102,000 Gain on Sale - Investments Investments Cash

29. Adjustments to Gains and Losses 10,000 -0- 10,000 3,000 2,000 -0- 2,000 5,000 Loss on Sale of Plant Assets Accum. Dep. Plant Assets Plant Assets Cash

30. Adjustments to Gains and Losses 10,000 -0- 10,000 3,000 2,000 -0- 2,000 5,000 Loss on Sale of Plant Assets Accum. Dep. Plant Assets Plant Assets Cash

33. Adjustments to Changes in Current Assets 706,000 47,000 55,000 698,000 706,000 698,000 Sales Accounts Receivable Cash

34. Adjustments to Changes in Current Assets 706,000 47,000 55,000 698,000 706,000 698,000 Sales Accounts Receivable Cash

35. Adjustments to Changes in Current Assets 144,000 110,000 34,000 34,000 Inventory Cash

36. Adjustments to Changes in Current Assets 144,000 110,000 34,000 34,000 Inventory Cash

37. Adjustments to Changes in Current Assets 2,000 1,000 5,000 6,000 2,000 6,000 Insurance Expense Prepaid Expenses Cash

38. Adjustments to Changes in Current Assets 2,000 1,000 5,000 6,000 2,000 6,000 Insurance Expense Prepaid Expenses Cash

41. Adjustments to Changes in Current Liabilities 50,000 43,000 513,000 513,000 520,000 520,000 Accounts Payable Cash Cost of Goods Sold

42. Adjustments to Changes in Current Liabilities 50,000 43,000 513,000 513,000 520,000 520,000 Accounts Payable Cash Cost of Goods Sold

43. Relationship of Inventory and Accounts Payable Accounts 520,000 144,000 110,000 520,000 554,000 50,000 43,000 547,000 554,000 547,000 Cost of Goods Sold Accounts Payable Inventory Cash

44. Relationship of Inventory and Accounts Payable Accounts 520,000 144,000 110,000 520,000 554,000 50,000 43,000 647,000 554,000 647,000 Cost of Goods Sold Accounts Payable Inventory Cash

45. Adjustments to Changes in Current Liabilities 12,000 9,000 3,000 3,000 Accrued Expenses Accrued Liabilities

46. Adjustments to Changes in Current Liabilities 12,000 9,000 3,000 3,000 Accrued Expenses Accrued Liabilities

47. Current Liabilities 3,000 5,000 2,000 2,000 Income Taxes Payable Cash

48. Adjustments to Changes in Current Liabilities 3,000 5,000 2,000 2,000 Income Taxes Payable Cash

49. Schedule of Cash Flows from Operating Activities: Indirect Method

50. Effects of Items on the Income Statement That Do Not Affect Cash Flows

51. Adjustments for Increases and Decreases in Current Assets

54. Accounting for Investments 78,000 115,000 127,000 90,000 102,000 78,000 12,000 Gain on Sale - Investments Investments Cash

56. Accounting for Plant Assets 120,000 715,000 505,000 120,000 10,000 103,000 68,000 2,000 5,000 8,000 37,000 Loss on Sale Plant Assets Accum. Dep. Plant Assets Plant Assets Cash

57. Accounting for Plant Assets 120,000 505,000 120,000 10,000 68,000 2,000 5,000 ??? 8,000 All items affecting the Plant Assets account have not been accounted for 715,000 103,000 37,000 Loss on Sale Plant Assets Accum. Dep. Plant Assets Plant Assets Cash

58. Accounting for Noncash Investing and Financing Transactions ??? 100,000 715,000 505,000 120,000 10,000 100,000 Cash Bonds Payable Plant Assets

59. Accounting for Cash Flows from Investing Activities

60. Accounting for Noncash Investing and Financing Transactions

62. Accounting for Cash Flows from Financing Activities 295,000 245,000 50,000 50,000 100,000 Income Taxes Payable Cash

63. Accounting for Cash Flows from Financing Activities 189,000 115,000 99,000 175,000 76,000 295,000 245,000 Common Stock Paid-in Capital - Common Cash

64. Accounting for Cash Flows from Financing Activities 8,000 140,000 132,000 16,000 8,000 16,000 Income Summary Retained Earnings Cash

65. Accounting for Cash Flows from Financing Activities 25,000 25,000 Treasury Stock Cash

66. Accounting for Cash Flows from Financing Activities

67. Statement of Cash Flows: Indirect Method