What is the Operating Cash Flow? What is the Financing Cash Flow? Bond payable P

Question

What is the Operating Cash Flow?

What is the Financing Cash Flow?

Bond payable Par Value Coupon Market Term Carring value at December 31, 20X1 240,000 4.80% 5.50% 232,826 Consolidated Income Statement 20X2 Sales Interest income Unrealized gain Dividend income Cost of goods sold Salary expense Marketing expense Utilities expense Amortization expense Depreciation expense Minority interest Interest expense Pretax income Tax expense Net income $ 603,000 9,100 2,200 4,220 186,900 132,660 82,610 56,680 6,570 45,600 7,890 12,805 86,805 26,042 $ 60,763 Consolidated Statement of Retained Earnin 20X2 $72,000 Beginning retained earnings Net income Dividends declared Ending retained earnings 60,763 9,100) $ 123,663

Explanation / Answer

Operating cashflow: $ $ Net income 60763 Add: Depreciation expense 45600 Amortization expense 6570 52170 Less:Unrealized gain 2200 49970 110733 Adjustment towards current assets and liabilities: Increase in accounts receivable -9870 Decrease in inventory 890 Increase in interest receivable -200 Decrease in accounts payable -1260 Increase in salaries payable 1210 Decrease in marketing payable -390 Increase in utilities payable 730 Decrease in taxes payable -589 Increase in deferred taxes payable-Depreciation 3270 Increase in deferred taxes payable-Investment 660 -5549 Operating cashflow 116282 Note: First we have to remove non-cash expenses and gains Then,Record change in current assets and current laibilities for changing from accrual to cash accounting Increase in current asset=cash outflow Decrease in current asset=cash inflow Increase in current liabilities=cash inflow Decrease in current liabilities=cash outflow Financing cashflow: Issue of shares (17220+24230) 41450 (increase in common stock+Increase in additional paid-in-capital) Dividends paid (Analyze dividend payable account) (Div paid=Beg. Bal+Div.declared-End.Bal) (1200+9100-1400) 8900 Financing cashflow 50350

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