GAAP requires that the Statement of Cash flows (SCFS) is prepared in a specific manner. For...

 

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GAAP requires that the Statement of Cash flows (SCFS) is prepared in a specific manner. For the following items, discuss in which section (operating, investing, or financing) of the SCFS they are found, where they might more appropriately be placed and why? a) b) c) Dividends received Interest paid Income taxes 1. The following is the Cash Flow Statement for Al Yasmeen Company for the year ended 2018 Al Yasmeen Company Statement of Cash Flows For the Year Ended December 31, Year 2018 (S thousands) Cash provided from (used for) operations Net Income.. $320 Add (deduct) items to convert to cash basis: Amortization 20 Depreciation.. Inc. in accounts payable. Inc. in deferred income tax Inc. in other current liabilities. 190 60 24 14 Inc. in accounts receivable. (620) Inc. in inventories... Inc. in prepaid expenses. Net cash used for operations. Cash provided from (used for) investing activities Purchase of patents Addition to plant and equipment.. (290) (50) $(332) (280) (1,400) Addition to other assets.... (50) Net cash used for investing activities. Cash provided from (used for) financing activities Addition to long-term debt. Issuance of common stock. (1,730) 1,600 400 Dividends paid (218) Net cash provided from financing activities. Net decrease in cash. 1,782 $(280) Supplemental disclosure of cash flow information Cash paid during year for: $56,000 $140,000 Interest. Income taxes REQUIRED a) Explain with the difference between the net income as per accrual basis and cash flow from operation. b) As a financial analyst what advices you will give Al Yasmeen Company to overcome such cash shortage situation. GAAP requires that the Statement of Cash flows (SCFS) is prepared in a specific manner. For the following items, discuss in which section (operating, investing, or financing) of the SCFS they are found, where they might more appropriately be placed and why? a) b) c) Dividends received Interest paid Income taxes 1. The following is the Cash Flow Statement for Al Yasmeen Company for the year ended 2018 Al Yasmeen Company Statement of Cash Flows For the Year Ended December 31, Year 2018 (S thousands) Cash provided from (used for) operations Net Income.. $320 Add (deduct) items to convert to cash basis: Amortization 20 Depreciation.. Inc. in accounts payable. Inc. in deferred income tax Inc. in other current liabilities. 190 60 24 14 Inc. in accounts receivable. (620) Inc. in inventories... Inc. in prepaid expenses. Net cash used for operations. Cash provided from (used for) investing activities Purchase of patents Addition to plant and equipment.. (290) (50) $(332) (280) (1,400) Addition to other assets.... (50) Net cash used for investing activities. Cash provided from (used for) financing activities Addition to long-term debt. Issuance of common stock. (1,730) 1,600 400 Dividends paid (218) Net cash provided from financing activities. Net decrease in cash. 1,782 $(280) Supplemental disclosure of cash flow information Cash paid during year for: $56,000 $140,000 Interest. Income taxes REQUIRED a) Explain with the difference between the net income as per accrual basis and cash flow from operation. b) As a financial analyst what advices you will give Al Yasmeen Company to overcome such cash shortage situation.

Answer rating: 100% (QA)

REQUIREMENT 1 a Dividends received Dividends received are found in the operating section of the SCFS because they are a part of the companys net incom... View the full answer