![]() ![]() ![]() Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts. In Beal's 20X4 Statement of Cash Flows, net cash used in investing activities was $705,000. Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Cash outflows for financing activities include payments of cash dividends or other distributions to owners (including cash paid to purchase treasury stock) and repayments of amounts borrowed. 10,000 shares of common stock were issued for $22 a share. The statement of cash flows classifies cash receipts and disbursements as operating, investing, and financing cash flows. There were no other transactions affecting long-term investments. Each of these statements are related, but separate and unique statements that help a business owner or anyone understand the cash flowing into and out of a. These distributions are reflected on your corporations balance sheet and in the. Instead, they are accounted for in the equity section of the balance. The main components of the CFS are cash from three areas: Operating activities, investing activities, and financing activities. Distributions of cash, or cash dividends, are typically called dividends. Most retirement plan distributions are subject to income tax and may be subject to an additional 10 tax. The differences in some of Beal Inc.'s Balance Sheet accounts at December 31, 20X4 and 20X3, are presented below: Assets Increase (Decrease) Cash and cash equivalents$ 120,000 Investments in debt classified as trading securities 300,000 Accounts receivable, net-Inventory 80,000 Long-term investments(100,000) Plant assets (gross) 700,000 Liabilities and stockholders' equity Accounts payable and accrued liabilities$ (5,000) Dividends payable 160,000 Short-term bank debt 325,000 Long-term debt 110,000 Common Stock, $10 par 100,000 Additional paid-in capital 120,000 Retained earnings 290,000 The following additional information relates to 20X4: net income was $790,000 cash dividends of $500,000 were declared building costing $600,000, with a carrying amount of $350,000, was sold for $350,000 equipment costing $110,000 was acquired through the issuance of long-term debt and a long-term investment was sold for $135,000. Withdrawals are not considered business expenses and do not appear on the income statement.
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