Name: Anindya Zahra Safitri

Student ID: 2440104630

Class: LC80
Lecturer: Ameliya Rosita
Course: Introduction to Financial Accounting

GSLC 12th December (Statement of Cash Flow)

1. Jelaskan mengapa laporan arus kas atau disebut juga statement of C/F itu penting?
2. a) Apa saja perbedaan direct dan indirect method dari suatu laporan cash flow? b). Buat
template dari msg2 statement of C/F tsb.
3. Sebutkan masing2 minimal 3 contoh dari:
a). Operation Activity b). Investing Activity c). Financing Activity d). Non cash Activity

Answers:
1. There are 3 main reasons why Cash Flow Statement is important:
 Cash flow statements provide the details where the money spent
First importance of Cash Flow statement is that when there are different payments which
the company makes and are not reflected in the profit and loss statement of the company,
whereas the same is present in the cash flow statement. Thus, the cash flow statement
provides the detailed areas where the money is spent by the company. For example,
there might be a situation where the company has the profits, but after payment of the
principal amount, it has no funds to pay off its obligations. Such situations can be
identified using the cash flow statement.
 Help the company to focus in excess cash
Every business enterprise runs for the motive of earning profits. The profit helps in
creating the cash, but there are other ways as well, which helps in creating the cash in the
company. These ways can be identified and implemented by focusing on the cash flow
statement.
 Help the company to make a financial planning
Cash Flow Statement is considered to be a useful tool for the management of the
company for the purpose of the financial planning, along with keeping the control of
cash. For meeting the various obligations, every business entity has to keep a sufficient
amount of liquid funds so that as and when the requirement arises, it can pay the same.
 Thus, the cash flow statement helps the financial manager in projecting the flow of
the cash in the near future by using the past data of the cash inflows and outflows.

2. a) The differences between direct and indirect method are:

No Differences Direct Method Indirect Method
1. Meaning It only uses the cash transaction, Uses net income as a base and
such as cash spent and cash adds non-cash expenses such
received to produce the cash flow as depreciation, or et adjustment
statement to make cash flow statement
2. How to work Reconciliation is done to separate Net income is automatically
the cash flow from other converted in the form of cash
flow.
3. Factors taken All non-cash transactions are All the factors taken into an
ignored account
4. Preparations There is no such preparation Mainly needed during
needed conversion of net income into
cash flow statement
5. Accuracy Very accurate as there is no need Not very accurate as
for any adjustments adjustments are being made
6. Time taken It takes more amount of time It takes less amount of time
7. Popularity Only few companies use this Predominantly used by many
method companies

b) - Example of cash flow statement using direct method

Nakada Company
Statement of Cash Flow (Direct)
For a year ending December 31, 2018

Cash Flow from Operating Activities

Cash receipts from customers $200,000
Cash paid to suppliers ($60,000)
Cash paid to employees ($50,000)
Interest paid ($10,000)
Income taxes paid ($12,000)
Net cash flow from Operating Activities $68,000

Cash Flow from Investing Activities

Purchase of property and equipment ($100,000)
Sale of property and equipment $50,000
Net cash flow from Investing Activities ($50,000)
Cash Flow from Financing Activities
Proceeds from long-term borrowing $50,000
Payment of Dividends ($15,000)
Net cash flow from Financing Activities $35,000

Net Increase in Cash $53,000

Beginning Cash Balance -

Ending Cash Balance $53,000

-Example of cash flow statement using indirect method

Nakada Real Estate Company
Statement of Cash Flow (Indirect)
For a year ending December 31, 2018

Cash Flow from Operating Activities

Net Income $3,000,000
Add (Deduct) non-cash expenses
Depreciation expenses $100,000
Amortization $20,000
Gain on sale of equipment ($30,000)
Increase in account receivable ($15,000)
Increase in account payable ($10,000)
Net cash flow from Operating Activities $3,065,000

Cash Flow from Investing Activities

Purchase of property and equipment ($100,000)
Sale of property and equipment $50,000
Net cash flow from Investing Activities ($50,000)

Cash Flow from Financing Activities

Proceeds from long-term borrowing $50,000
Payment of Dividends ($15,000)
Net cash flow from Financing Activities $35,000

Net Increase in Cash $3,050,000

Beginning Cash Balance -

Ending Cash Balance $3,050,000

3. A) Example of Operating Activity
 Cash receipts from the following
 Sales of goods and services
 Interest received from loans
 Dividends received from investments
 Cash payment for the following:
 Merchandise purchase from suppliers
 Employee payroll
 Interest paid to lenders
B) Example of Investing Activity
 Cash receipts from the following
 Sales of long-term investment
 Sales of property, plant and equipment
 Collection of principal loans
 Cash payment for the following:
 Purchase of long-term investment
 Purchase of property, plant and equipment
 Loans made to other entities
C) Example of Financing Activity
 Cash receipts from the following
 Issuance of common stock
 Issuance of notes
 Issuance of bonds
 Cash payment for the following:
 Principal amount of loans
 Principal amount of bonds
 Repurchase of common stock (treasury stock)
 Cash dividends
D) Example of Non-Cash Activity
 Depreciation
 Amortization
 Employee stock-based compensation
 Deferred income tax