Under the indirect method of preparing a statement of cash ﬂows, why do gains and losses affect net income when determining net cash ﬂow from operating activities?
Answer to relevant QuestionsWhy might users prefer the direct method of preparing a statement of cash flows to the indirect method? Which method is more commonly used? Why? How is cash flow per share typically computed? Why would the inclusion of cash ﬂow per share not be desirable in annual reports? Heliski Corp. had a $7,320 beginning balance in Dividends Payable and an ending balance in that account of $12,492. During 2009, Heliski’s board of directors declared total cash dividends of $0.20 per share on the 649,475 ...Following are classiﬁcations for items that may appear on a statement of cash ﬂows prepared on a direct basis: (1) Cash inﬂow from operating activities (2) Cash outﬂow from operating activities (3) Cash inﬂow from ...Following is an income statement for Caliope, Inc., for the year ended December 31, 2009, and the company’s balance sheets as of December 31, 2008 and 2009. The prepaid expenses and accrued liabilities included in ...
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