xzz

Cash inflows, 792, activities that increase cash and are sources of cash. Cash outflows, 792, activities that decrease cash and are uses of cash. Direct method, 793, method that assigns support department costs only to the producing departments. No cost from one support department is given to another support department; thus, it ignores support department interaction Financing activities, 793, those activities that raise (provide) cash from (to) creditors and owners. Indirect method, 793, computes operating cash Rows by adjusting net income for noncash items, nonoperating gains and losses, and accruals. Investing activities, 793, those activities that involve the acquisition or sale of long-term asset Noncash investing and financing activities, 794, investing and financing activities that take place without affecting cash. Operating activities, 793, the ongoing. day-to-day, revenue-generating activities of an organization. Statement of cash flows, 792, a statement that provides information regarding the sources and uses of a firm's cash. . n20 1. Statement of Cash Flows: Indirect Method The following balance sheets are taken from the records of Golding Inc.: 20X1 20X2 Assets Cash $130,000 $150,000 Accounts receivable 25,000 20,000 Plant and cquipment 50,000 60,000 Accumulated depreciation (20,000) (25,000) Land 10,000 10,000 Total assets $195.000 $215.000 Liabilities and equity Accounts payable $ 10,000 $ 5,000 Bonds payable 8,000 18,000 Common stock 120,000 120,000 Retained carnings 57,000 72,000 Total liabilities and cquity $195,000 $215.000 Additional information is as follows: Equipment costing $10,000 was purchased ar year- end. No equipment was sold. Net income for the year was $25,000, and $10,000 in dividends were paid. Required: Prepare a statement of cash flows using the indirect method