Name:

Date:

Matching

Referring to the items listed below, place the appropriate letter next to the corresponding description.

a. Direct method f. Noncash charges / expenses k.

b. Financing activities g. Noncash credits / revenues l.
c. Indirect method h. Operating activities m.
d. Investing activities i. Separate schedule n.
e. Cash flows from operating activities j. Statement of cash flows

1. Generally include the cash effects of transactions and other events that e
of net income.
2. Replaced by the statement of cash flows.
3. Reports the flow of cash into and out of a business in a given period.
4. Current assets minus current liabilities.
ption.

Statement of changes in financial position

Working capital
Cash flow margin ratio
Cash flow per share of common stock outstanding

tions and other events that enter into the determination

siness in a given period.

 Problem

1. Common-size percentages are often used to compare the statements of companies of unequal size. The condensed incom
given below. Enter in the spaces provided the amounts expressed in common-size percentages.

Company A and Company B

Income Statements for Year Ended December 31, 2007

Dollar Amounts

Company A
Sales $450,000
Cost of goods sold 261,000
Gross margin $189,000
Selling expenses $81,000
 Problem

ompanies of unequal size. The condensed income statements of Companies A and B are
mon-size percentages.

pany A and Company B

s for Year Ended December 31, 2007

Dollar Amounts

Company B
$525,000
210,000
$315,000
$89,250