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Create an annual sources and uses of funds statement. When the above statement is completed and the balances tie out: Adjust the change in PP&E
- Create an annual sources and uses of funds statement.
- When the above statement is completed and the balances tie out:
- Adjust the change in PP&E for the year's depreciation expense to calculate capital expenditures.
- Consolidate the change in working capital accounts other than cash by adding together the changes in individual working capital accounts. BE ESPECIALLY MINDFUL OF USING THE CORRECT SIGNS.
- Similarly, consolidate changes in other operating assets and liabilities that would not be accounted for in other cash flow categories (i.e., investing or financing).
- Adjust the change in retained earnings to reflect its subcomponents and place those subcomponents in the appropriate "buckets" on the cash flow statement.
- Reorganize the rest of the adjusted sources and uses information to complete a properly formatted cash flow statement, using the required categories of operations, investing and financing and reconciling to the year's change in cash.
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