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General Accounting Discussions: financial accounting

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    • CommentAuthordm2495
    • CommentTimeJan 2nd 2008
     
    If there is reported revenues of $215,000 and a net income of $60,000 for 2007. Cash generated by operations was $55,000. In addition, $36,000 was borrowed from a bank and during 2007 new equipment was bought for $30,000 cash and $20,000 was paid in cash dividends to stockholders. What would the amount of cash flow be?
    • CommentAuthorAbusamak
    • CommentTimeJan 2nd 2008
     
    hello,
    net icome 60000
    +operating 55000
    -investement (30000)
    -divident (20000)
    +borrowing 36000
    = 101000 net change in cash in the period
    but you must add the bigining balance of cash to conduct the ending balance of cash.


    Abdullah Abusamak.CMA
    • CommentAuthorquickr
    • CommentTimeJan 4th 2008
     
    if you want to see what cash flows occurred, construct a cash flow diagram, with cash going out to the bottom(-) and cash coming in to the top(+). you should divide your diagram into however many regular time periods that you use, often this can be twelve periods/yr. then just add your negatives and sum them and add your positive cash flows and then subtract to find the net amount of cash flow

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