Table 3: Any Company, Inc.: Statement of Cash Flows

for the Year Ended Dec. 31, 20_____

Cash from operating activities: Net income $ 52 Depreciation 30 Deferred taxes 3 Increase in monetary assets other than cash 2 Gain on sale of investment (5) $82 Cash for investing activities: Purchase of equipment $(41) Sale of investment 19 22 Cash from financing activities: Issuance of bonds $10 Cash dividends (35) (25) Increase in cash balance $35

III. Answer the questions.

1. What are three categories illustrated in the statement of cash flows?

2. What is the difference between an income statement and a statement of cash flows?

3. Is the cash from operations the same as net income?

4. Why must a company plan its cash flow?

5. What does the statement of cash flow indicate?

6. What does it measure? Explain your answer.

IV. Read and translate the following word combinations.

Depreciation, deferred taxes, gain on sale of investment, purchase of equipment, net income, cash dividends, sale of investment, issuance of bonds, increase in monetary assets other than cash, the long-run success.

V. Using the word combinations of exercise 3 complete the table.

Cash from operating activities	Cash from investing activities	Cash from financing activities
		issuance of bonds
	sale of investment
deferred taxes

VI. Checking facts and ideas.

Decide if these statements are true or false. Correct false statements.

1. Cash flows result from two major groups of activities: investing and operating activities.

2. The income statement differs from the cash flow statement.

3. Cash is not received from the issuance bond.

4. Cash is paid to shareowners as dividends.

5. Cash is paid to purchase equipment.

6. Cash from operations is the same as net income.

7. All revenues are collected in cash.

8. Revenue is usually recorded when a customer receives merchandise or pays for it.