Answer:
$45,780 Operative Cash Flow
$55,560 Cash Flow Ind Method
Step-by-step explanation:
$55,560 Cash Flow Ind Method
$44,400 Net Income
$4,350 Depreciation
-$6,720 Dividends
-$10,320 Accounts Receivable
$7,350 Accounts Payable
$24,690 Notes Payable
-$8,190 Property and Equipment
$45,780 Operative Cash Flow
$44,400 Net Income
$4,350 Depreciation
-$10,320 Accounts Receivable
$7,350 Accounts Payable
To prepare the statement of cashflow it's necessary to calculate the difference between the balance on each year.
First we need the value of the Net Income and Depreciation of the year as initial value of the cash flow ($55,560+$4,350),
then we deduct the amount of dividends paid during the year (-$6,720).
Then we begin to calculate the Assets section, everytime that the Assets are higher than the past year we have to put money
from the cash flow to compensate the assets increase and vice versa, with exception of the Cash Accounts that we are calculating.
Per Example: Accounts Receivable -$10,250.
Property decreased Cash flow which means that we buy some assets (-$8,190 )
Then with the Liabilities we do the same but in this case an increase in the liabilities means we have more money to our cash flow,
per example, an increase in the accounts payable means that we paid less to our suppliers so we have the money in the cash accounts.
Per Example: Accounts Payables $7,350.
The Cash provided by the operative activities try to find the cash inflows and outflows caused by the company's operations,
so it only includes the income statement and from the balance the deviation in the Accounts Payable, Inventories,
Depreciation and the account payable segment.
This statement doesn't include Sales and purchases of assets, dividend distributions and financial movements because this are among the
non operating activities that affect cashflow.