Operating, Financing, and Investing activities
Payment of sales salaries
operating
depreciation expense
operating
increase in a/r
operating
payment of interest
operating
Increase in a/p
Operating
Net income
Operating
PPE and what activities does it Cover?
Property, Plant, Equipment, Investing Activities
Steps for Indirect Method Operating Activities
1) Get net profit/loss from income statement 2) Add back all non-cash expenses 3) Adjust for all working capital (current assets - current liabilities) Then comes the net cash flows from operating activities
What makes up non-cash expenses?
Depreciation, gain/loss on sale, expenses
Dividends paid
Financing
Operating activities
Transactions and events that affect net income
Investing activities
Transactions and events that come from the sale and purchase of long-term assets
Ending retained earnings equation
beginning retained earnings + net income - dividends
issuance of common stock
financing
issue of notes payable- cash inflow of 20,000
financing
payment of cash dividend
financing
purchase of treasury stock
financing
retirement (payment) of bonds
financing
purchase of equipment
investing
purchase of land
investing
sale of land or building
investing
conversion of bonds into common strock
noncash activities
exchanges of long-lived assets
noncash activities
issuance of common stock to purchase assets
noncash activities
issuance of debt to purchase assets
noncash activities
Financing activities
transactions and events that affect long-term liabilities and equity