Learning Objective 3
Statement of Cash Flows: Prepare a statement of
cash flows using the
—Indirect Method indirect method.
Illustration 13-5
Comparative statements of financial position, income statement,
and additional information for Computer Services Company
13-1 LO 3
Illustration 13-5
Comparative statements of financial position, income statement,
and additional information for Computer Services Company
13-2 LO 3
Change in
2017 2016 Account
Balance
Illustration 13-5
Additional information for 2017:
1. Depreciation expense was comprised of €6,000 for building and €3,000 for
equipment.
2. The company sold equipment with a book value of €7,000 (cost €8,000, less
accumulated depreciation €1,000) for €4,000 cash.
3. Issued €110,000 of long-term bonds in direct exchange for land.
4. A building costing €120,000 was purchased for cash. Equipment costing €25,000
was also purchased for cash.
5. Issued ordinary shares for €20,000 cash.
6. The company declared and paid a €29,000 cash dividend.
13-3 LO 3
Langkah-langkah membuat
Cash Flow - Operating activities
1. Ambil angka net income after tax.
2. Transaksi non-cash dibuang dari net income
(depreciation exp, amortization exp, loss on sale of PPE,
gain on sale of PPE)
3. Perubahan current assets
● Bila current asset turun, berarti kas masuk (berlaku
sebaliknya).
4. Perubahan current liabilities
● Bila current liabilities turun, berarti kas keluar (berlaku
sebaliknya)
13-4
Step 1 & 2
Step 1
Step 2
13-5 LO 3
Mengapa Loss dan Gain penjualan aset
tetap disebut transaksi non-cash?
Contoh:
PT A menjual old equipment dengan harga $15,000, yang memiliki
book value $ 12,000.
Maka selisih harga jual dibanding book value adalah gain $3,000,
karena uang yg diterima PT A > dari nilai equipment bekas.
Namun kas masuk adalah $15,000, bukan $3,000. sehingga yg
seharusnya tercatat di cash flow adalah $15,000 di bagian investing
activities.
Jurnal penjualan asset tetap
Cash 9,000
Loss 1,000 (non-cash harus dibuang dr net income
Accumulated deprec 5,000
Equipment 15,000
13-6
13-7
Step 3
Illustration 13-10
Step 3
13-8 LO 3
Step 4
CHANGES TO NON-CASH CURRENT LIABILITY
ACCOUNTS Illustration 13-11
13-9 Step 4 LO 3
Summary Step 1 - 4
Summary of Conversion to Net Cash Provided
by Operating Activities—Indirect Method
Illustration 13-12
Adjustments required to convert net income to net cash provided by operating activities
13-10 LO 3
Investing Activities
Company purchased land of €110,000 by issuing long-term
bonds. This is a significant non-cash investing and financing
activity that merits disclosure in a separate schedule.
Land
1/1/17 Balance 20,000
Issued bonds 110,000
12/31/17 Balance 130,000
Bonds Payable
1/1/17 Balance 20,000
For land 110,000
12/31/17 Balance 130,000
13-11 LO 3
Investing Activities
From the additional information, the company acquired an
office building for €120,000 cash. This is a cash outflow
reported in the investing section.
Building
1/1/17 Balance 40,000
Office building 120,000
12/31/17 Balance 160,000
13-12 LO 3
Investing Activities
The additional information explains that the equipment increase
resulted from two transactions: (1) a purchase of equipment of
€25,000, and (2) the sale for €4,000 of equipment costing €8,000.
Illustration 13-13
Equipment
1/1/17 Balance 10,000 Cost of equipment sold 8,000
Purchase 25,000
12/31/17 Balance 27,000
Cash 4,000
Journal
Accumulated Depreciation 1,000
Entry
Loss on Disposal of Plant Assets 3,000
Equipment 8,000
13-13 LO 3
Investing Activities
Partial statement Illustration 13-14
13-14 LO 3
Financing Activities
The increase in ordinary shares resulted from the issuance of
new shares.
Share Capital - Ordinary
1/1/17 Balance 50,000
Shares sold 20,000
12/31/17 Balance 70,000
13-15 LO 3
Financing Activities
Retained earnings increased €116,000 during the year. This
increase can be explained by two factors: (1) Net income of
€145,000 increased retained earnings, and (2) Dividends of
€29,000 decreased retained earnings.
Retained Earnings
1/1/17 Balance 48,000
Dividends 29,000 Net income 145,000
12/31/17 Balance 164,000
13-16 LO 3
Illustration 13-14
Statement
of Cash
Flows
Indirect
Method
13-17
LO 3
● See you on the next slide
13-18
