(A Private teaching
point of Business study)
Calculation of cash from operating activities ( Direct Method)
1.Cash receipts from customer
Details
|
Amount
|
Sales / service
revenue
Add: decrease of Accounts receivable
Less: increase of Accounts receivable
|
xxx
xxx
(xxx)
|
2.Cash receipt from interest Revenue
Details
|
Amount
|
Interest Revenue
Add: Decrease of interest receivable
Less: increase of interest receivable
|
xxx
xxx
(xxx)
|
3.Cash payment to supplier
Details
|
Amount
|
Cost of goods sold
Add: increase of inventory
Add: decrease of
accounts payable
Less: increase of Accounts payable
Less: decrease of inventory
|
xxx
xxx
xxx
(xxx)
(xxx)
|
4.Cash payment for
operating expenses
Details
|
Amount
|
Operating expenses
Add: increase prepaid expenses
Add; decrease expenses Payable
Less: increase expenses Payable
Less: decrease prepaid expenses
|
xxx
xxx
xxx
(xxx)
(xxx)
|
5.Cash payment for income taxes
Details
|
Amount
|
Income tax expenses
Add: Decrease of income tax payable
Less: increase of income tax payable
|
xxx
xxx
(xxx)
|
6.Cash payment for Interest
Details
|
Amount
|
Interest expenses
Add: Decrease of interest payable
Less: increase of interest payable
|
xxx
xxx
(xxx)
|
Calculation of cash
from operating activities ( indirect Method)
Details
|
Amount
|
Amount
|
Net Income
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation Expense
Increase
in Current liabilities Ω
Decrease
in Current assets **
Increase in current assets **
Decrease in current liabilities Ω
Loss on sale of fixed assets or debt retirement
Gain on sale of fixed assets or debt retirement
Net Cash Provided
by Operating Activities
|
xxx
X
X
X
(X)
(X)
X
(X)
|
XXXX
|
**Examples: A/R, Inventory, prepaid expenses,
and trading securities
Ω Examples: A/P, accrued Income,
and unearned rent; excludes dividends payable.
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