Explore BrainMass
Share

Cash Flow Statement

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

What are the differences between the direct and indirect method of presenting a statement of cash flows?

Which method of presenting a statement of cash flows is the best? Why?

© BrainMass Inc. brainmass.com October 17, 2018, 12:37 am ad1c9bdddf
https://brainmass.com/business/statement-of-cash-flows/cash-flow-statement-301724

Solution Preview

The direct method of presenting a cash flow statement is where we do not start from Net Income and make necessary adjustments. In the direct method we put in actual cash collected and actual cash paid out in the operating section of the cash flow statement. There are no ...

Solution Summary

The solution goes into a great amount of detail in order to answer the question. The solution is very well written and easy to understand. The explanation can be very easily understood by anyone with a basic understanding of the concepts. Overall, an excellent response to the question being asked.

$2.19
Similar Posting

Income Statement and Cash Flow Statement

Please open the attached PDF file and then answer 2 question below using the information in the attached PDF file.

Question #1: Please develop a budgeted Income Statement.

Question #2: Complete a cash flow statement on a quarterly bases (assume that annual expenses are evenly dispersed on a quarterly bases) using the information in the attached PDF file.

A. There are 2 products: Car Batteries and Boat Batteries

B. There are 2 sales regions: Southeast and Southwest

C. There are 2 manufacturing divisions: Production and Assembly

D. Sales Prices: Car Batteries-$30.00; Boat Batteries-$35.00

E. There are 2 raw materials for each battery: Plastic and Electrodes

F. Raw materials prices: Plastic-$1.00: Electrodes—$2.00

G. Average Direct Labor Rates (per hour): Production-$4.00; Assembly- $3.00

H. The Manufacturing overhead rates (based on Direct Labor) are Production $2.00; Assembly $1.00

I. The order cost is $15.00

J. The annual carrying cost per unit of inventory is $1.50

K. Product Specification (see attachment for table)

L. Planned Sales (units). Planned Sales (units) (Sales are 95 % cash. The
balance of the sales is received in the following quarter. There is no bad
debt).

(see attachment for table)

M. Inventory Levels (units) - Assume no work in process:

(see attachment for table)

View Full Posting Details