© know the different components that comprise the statement o © prepare the statement of cash f ‘ThelStatement of Cash Flows summarizes the cash receipts and cash disbursements for a Accounting period. It summarizes the cash activities of the business by classifying cash Inflos (receipts) and cash outflows (payments) into operating, investing, and financing activities ‘shows the net increase or decrease of cash ina given period and the cash balance at the end of usiness to generate cash and projet period. This allows management to assess the ability of the bu future cash flows, T OF CASH FLOWSCOMPONENTS OF THE STATEMENT OF CASH FLOWS CLASSIFIED ACCORDING TO ACTIVITIES Operating activities ~ the cash inflows (rece from the normal operations of the business 3) and the cash outflows (payments) arising Receipts of Cash + collections from customers for the performance of services or sale of goods + royalties, ees, commissions received + nterest, dividends, and other income rfceived Payments of Cash ‘+ to suppliers for services and goods acquired + employees’ salaries + government licenses and taxes + interest expense + other operating expenses Unyesting Activities’ the cash inflows (receipts) and the cash outflows (payments) from the purchase and sale of property and equipment, investment in debt or trading securities, lending ‘money and collection of the principal amount of the money loaned. ‘Financing Activities’ the cash inflows (receipts) and the cash outflows (payments) from the owners and creditors of the business Receipts of Cash + original and additional investments by owner + proceeds of loan Payments of Cash + cash withdrawal of owner * payment for the principal balance of loan elncc' icon fotanonaarg to nana [-(65)Inv - ifthe cash flow activity is inv Fin - ifthe cash flow is financing NOT- (ifthe tem is nota cash flow activity 1 c 3. Cash collection from customers. | In 4 Cash sale of company asset | Bp 6, Payment of income tax | 0p 9. Payment ofacounts payable Ta¥__10. Proceeds from sale of land j eect payment orbank loan Dp 12. Rent received from lease of business property Op 13. Royalties received from sale of CD. | WOT. 14. Depreci | G15. Collection of accounts receivable BOT 16. Provision for uncollectble accounts Op 17. Payment of rent { 18. Payment of accounts payable Oe 19. Collections from customers for legal services rendered jon expenseZin__ 20. Additional investment of owner 21. Purchase of store supplies, in 22. Withdrawal of owner Dp 23. Payment of employees’ salaries _—_Uppirw 24. Payment of interest on bank loan i__ 25. Proceeds of bank loan Iny__ 26. Proceeds from sale of truck Ein 0927. Interest income from bank account Op 28, Payment of government taxes Jav__ 29. Purchase of company tools Jp 30. Dividend received from stock investment Exercise 2] Determine the net cash flow from operating activities of Launcelot Company for 2017 given the following data. Cash paid to suppliers Cash dividends received Delivery Income receivable Rent income received Cash paid for salaries Collection from customers Proceeds of Bank Loan Cash paid for income tax Cash paid for utilities Interest received from bank deposits Proceeds from sale of equipment Bad debts expense Cash paid for advertising Commission income received Collection of accounts 39,000 15,500 99,000 87,000 108,000 399,500 500,000 5,000 77,000 3,980 8,000 7,890 35,000 14,000 31,000