1. The CASH FLOW Statement (Statement of changes in financial position) Text Chapter 18, Pages 820-842, 854-857 Practice Questions: 1.BE18-1, BE18-2, BE18-3, E18-1, E18-2 2.BE18-4, Be18-5, BE18-6, E18-3, E18-4, E18-5 3.BE18-11, E18-10, E18-11

2. Financial Statements (read p.820) What does the BS show users?   What does the IS show users?   But referring to the loss of W49 what is the problem with the IS? 

3. PURPOSE OF THE CASH FLOW STATEMENT provide information about the cash receipts and cash payments during a fiscal period. A secondary objective is to provide information about its 1. 2. 3.

4. CASH FLOW STATEMENT TRACKS THE CASH (and cash equivalents – see p. 823) OF THE BUSINESS.  If it does not affect cash, do ____ report in body of cash flow statement  Report in ______________ to the financial statements

5. Include –Cash effects of transactions that create revenues and expenses and –Enter into determination of net income (loss) Cash Flow Part 1 (p.823) OPERATING ACTIVITIES

6. Include –Purchasing and disposing of investments and productive long- lived assets using cash and –Lending money and collecting the loans Cash Flow Part 2 (p.823) : INVESTING ACTIVITIES

7. Include –Obtaining cash from issuing debt and repaying the amounts borrowed and –Obtaining cash from owners/shareholders and paying them drawings/dividends Cash Flow Part 3 (p.823) : FINANCING ACTIVITIES

9. PREPARING THE CASH FLOW STATEMENT  It is ____ prepared from the adjusted trial balance.  The cash flow statement deals with cash receipts and payments, so the ____________ ____________________  p.826”accounting in action”: Where did the money go? Three sources of information: 1. 2. 3. Two Methods  indirect (most common) & direct

10. 18-3- THREE MAJOR STEPS IN PREPARING THE CASH FLOW STATEMENT 18-3- THREE MAJOR STEPS IN PREPARING THE CASH FLOW STATEMENT + or - The difference between the beginning and ending cash balances can be easily calculated from comparative balance sheets. This step involves analysing not only the current year’s income statement but also comparative balance sheets and selected additional data. XYZ Goods This step involves analysing comparative balance sheet data and selected additional information for their effects on cash. For Sale InvestingFinancing Step 1: Determine the net increase (decrease) in cash. Step 2: Determine net cash provided (used) by operating activities. Step 3: Determine net cash provided (used) by investing and financing activities. Page 828 Do It #1-5,