Managerial Accounting Statement Cash Flow Direct Method
Preparation of cash flow statement by direct method, showing construction for operating activities, investing activities and financing activities
Comments
This is very thorough and helpful. Thank you!
Wow! Extremely well put. I greatly appreciate your intellectual donation!
when Inventory decreased we consider inflow cash equal 10000=14700-4700 ?? so we adding it ?
Sir thanks for your explanation , but I know increasing assets mean minus it , and decreasing Assets mean Adding it, in this video you did subtracts the increases in Accounts receivables (32200) vise versa dealing with inventory that you did subtract (10000) .
Thank you Sir. Great explanation.
Thank you ! It helped me to prepare for exams
Hello, Thank you for the explanation, its very helpful.. however I have a question.. For prepaid insurance, I have a different result from the one you have, my result is 16,300 and not 15,700 .. I followed your instructions, where did I go wrong?
Thank you
Great tutorial, you explained better than my professor. Thank you sir
Remember that by the direct method you need cash paid to suupliers which means you need purchases of materials.
Purchases of materials:
Cost of materials sold
ADD Inventory at enf
LESS inventory at start
= Purchases
Finished goods that did not sell are inventory (stock if you follow the old English termnology)
Then payment to supplier
Purchases of materials
Add payables at start
Less payables at end
=Cash paid to suppliers
Hope this answers your question
Great Video. I have a couple of Quick question.
If you made a bunch of Finished goods and didn't sell that many, where would this be reflected? does it even reach the statement of cash flows?