- #Net cash flow from investing activities zip file
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The accountant must study the available data to determine that missing number because that balance is also removed when the asset is sold.Īccumulated depreciation at the start of the year was $300,000 but depreciation expense of $230,000 was then reported as shown in Figure 17.10 "Account Balances to Illustrate Cash Flows from Investing Activities". However, the accumulated depreciation relating to the disposed asset is not known. This transaction is analyzed first because the cost of the equipment is already provided. Other equipment was acquired, also for cash.Equipment costing $600,000 was sold this year for cash.In looking through the financial records maintained by this business, assume the accountant finds two additional pieces of information about the accounts in Figure 17.10 "Account Balances to Illustrate Cash Flows from Investing Activities":
To illustrate, assume that the Hastings Company reports the account balances that appear in Figure 17.10 "Account Balances to Illustrate Cash Flows from Investing Activities".įigure 17.10 Account Balances to Illustrate Cash Flows from Investing Activities Even then, the cash portion of these transactions may have to be determined by mathematical logic. Often, the journal entries that were made originally must be replicated. At times, determining the individual cash effects can resemble the work needed to solve a puzzle with many connecting pieces. The difficulty in this process frequently comes from having to sort through multiple purchases and sales to compute the exact amount of cash involved in each transaction. A sale of land can create a cash inflow whereas the acquisition of a building may well require the payment of some amount of cash. The amount of every cash change is identified and reported. Instead, each of the other asset accounts (land, buildings, equipment, patents, trademarks, and the like) is investigated to determine the individual transactions that took place during the year. How does a company arrive at the investing activity figures that are disclosed within the statement of cash flows?Īnswer: Here, the accountant is not interested in assets such as inventory, accounts receivable, and prepaid rent because they are included within operating activities. With a strong knowledge of financial accounting, a portrait of a business and its activities begins to become clear.Īfter the various cash amounts are determined, conveyance of this information does not appear particularly complicated. Interestingly, this expenditure level is approximately 20 percent higher than the monetary amount invested in those assets the previous year.
For example, a potential investor can see that officials chose to spend over $2.1 billion in cash during this year in connection with Disney ’s parks, resorts and other property. Information about management decisions is readily available.
This section of Disney ’s statement of cash flows shows that a number of transactions involving assets (other than operating assets such as inventory and accounts receivable) created this $4.5 billion reduction in cash.
#Net cash flow from investing activities zip file
zip file containing this book to use offline, simply click here.įigure 17.9 The Walt Disney Company Investing Activity Cash Flows for Year Ended October 2, 2010
#Net cash flow from investing activities download
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#Net cash flow from investing activities license
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