readingright.blogg.se

20,000.Ĭash flow from Investing Activities:- Particulars 40,000 and some patents were sold at a profit of Rs. 40,000 with its accumulated depreciation of Rs. Income Tax Paid = Rs 10,000 + Rs 3,000 − Rs 2,000 = Rs 11,000įrom the following calculate cash flow from investing activities:- Particulars.

Dividends paid on equity and preference capital.įrom the following information, calculate cash flow from operating activities using direct method.Interest paid on debentures and long-term loans and advances.Cash proceeds from issuing debentures, loans, bonds and other short/ long-term borrowings.Cash proceeds from issuing shares (equity or/and preference).Dividend received from investments in other enterprises.įinancing activities relate to long-term funds or capital of an enterprise, e.g., cash proceeds from issue of equity shares, debentures, raising long-term bank loans, repayment of bank loan, etc.Interest received in cash from loans and advances.Cash receipt from disposal of shares, warrants or debt instruments of other enterprises except those held for trading purposes.Receipt from the repayment of advances or loans made to third parties (except in case of financial enterprise).Cash receipt from disposal of fixed assets including intangibles.Cash advances and loans made to third party (other than advances and loans made by a financial enterprise wherein it is operating activities).Cash payments to acquire shares, warrants or debt instruments of other enterprises other than the instruments those held for trading purposes.Cash payments to acquire fixed assets including intangibles and capitalised research and development.Investing activities relate to purchase and sale of long-term assets or fixed assets such as machinery, furniture, land and building, etc. Investing activities are the acquisition and disposal of long-term assets and other investments not included in cash equivalents. Cash payments of income taxes unless they can be specifically identified with financing and investing activities.Cash payments to an insurance enterprise for premiums and claims, annuities, and other policy benefits.Cash payments to and on behalf of the employees.Cash payments to suppliers for goods and services.Cash receipts from royalties, fees, commissions and other revenue.Cash receipts from sale of goods and the rendering of services.Examples of cash flows from operating activities are: They generally result from the transactions and other events that enter into the determination of net profit or loss. Cash flows from operating activities are primarily derived from the main activities of the enterprise. Operating activities are the activities that constitute the primary or main activities of an enterprise. It also enhances the comparability of the reporting of operating performance by different enterprises because it eliminates the effects of using different accounting treatments for the same transactions and events.

Cash flow information is useful in assessing the ability of the enterprise to generate cash and cash equivalents and enables users to develop models to assess and compare the present value of the future cash flows of different enterprise.A cash flow statement when used along with other financial statements provides information that enables users to evaluate changes in net assets of an enterprise.The primary objective of cash flow statement is to provide useful information about cash flows (inflows and outflows) of an enterprise during a particular period under various heads, i.e., operating activities, investing activities and financing activities Benefits of Cash Flow Statement A Cash flow statement shows inflow and outflow of cash and cash equivalents from various activities of a company during a specific period.