1. 4.04 Statement of Cash Flows
Apply procedures for preparing corporate financial statements.

2. Statement of Cash Flows
Heading Section
Write the name of the company.
Write the name of the statement.
Write the date.

3. Statement of Cash Flows
B. Cash Flows from Operating Activities
Operating Activities
Cash Inflows (sources of cash)
Cash Sales of Merchandise
Cash Sales of Services
Interest Income
Dividends Received
Cash Received from Charge Customers
Cash Outflows (uses of cash)
Advertising
Credit Card Fees
Insurance Expense
Interest Payments
Payroll Expenses
Property Taxes
Utility Expenses
Income Tax

4. Statement of Cash Flows
B. Steps in Reporting Cash Flows from Operating Activities
Enter the net income as shown on the comparative income statement.
Add the amount of depreciation expense to net income.
Analyze the changes in current assets.
Analyze the changes in current liabilities.
Determine the cash provided by operating activities (cash increases) or the cash used by operating activities (cash decreases).

5. Statement of Cash Flows
C. Cash Flows from Investing Activities
Investing Activities
Cash Inflows (sources of cash)
Sale of Property
Sale of Equipment
Sale of Building
Collections of Long-term Loans
Cash Outflows (uses of cash)
Purchase of Land
Purchase of Equipment
Purchase of Building
Purchase of Patents or Special Licenses
Loans to Other Companies
Purchase of Stock in Other Companies
Purchase of Bonds in Other Companies

6. Statement of Cash Flows
C. Steps in Reporting Cash Flows from Investing Activities
Analyze changes in long-term assets. (plant assets)
Determine the cash provided by investing activities (if cash increases) or the cash used by investing activities (if cash decreases).

7. Statement of Cash Flows
D. Cash Flows from Financing Activities
Financing Activities
Cash Inflows (sources of cash)
Capital Stock Issue
Mortgage Issue
Bond Issue
Long-Term Loans
Cash Outflows (uses of cash)
Purchase of Treasury Stock
Payment of Cash Dividends
Repayment of Loan/Note Principal
Retirement of Bond Principal

8. Statement of Cash Flows
D. Steps in Reporting Cash Flows from Financing Activities
Analyze changes in long-term liabilities.
Analyze changes in cash identified on the statement of stockholders’ equity.
Determine the cash provided by financing activities (if cash increases) or the cash used by investing activities (if cash decreases).

9. Statement of Cash Flows
D. Steps in Completing the Statement of Cash Flows
Compute the net increase or decrease in Cash resulting from operating, investing, and financing activities.
Identify the beginning cash balance from the comparative balance sheet. The beginning cash balance for the current year is the ending cash balance from the prior year.
Compute the ending cash balance.
Verify that the Cash Balance, End of Period matches the cash balance shown on the comparative balance sheet.