Rules of Statement of Cash Flow

Rules of Statement of Cash Flow (Indirect Method)

Explanation	Tk	Tk
Cash Flows from Operating Activities:
Net Income		000
Adjustment of Reconcile:
Increase in Current Assets (-)	000
Decrease in Current Assets (+)	000
Increase in Current liability (+)	000
Decrease in Current liability (-)	000
Depreciation + loss	000
Gain on sale of assets (-)	000
		000
Cash flow provided (if profit)/ used (if loss) by operating activities.		000
Cash flows from Investing Activities:
Sales of land/building/financial assets(+)	000
Purchase of land/building/financial assets(-)	000
Cash flow provided (if profit)/ used (if loss) by Investment activities.		000
Cash flows from Financing Activities:
Issue of common stock(+)	000
Redemption of bond(-)	000
Dividend paid(-)	000
Cash flow provided (if profit)/ used (if loss) by Investment activities.		000
Net income or Decrease of cash		000
Opening cash		000
Ending cash		000
If show profit then have to write provided by, if show loss then have to write Used by.

Rules of Statement of Cash Flow (Direct Method)

Investment activities and Financing activities will be remaining same like as indirect method. Here have to use Sales instead of Net income. In the indirect method we had to use Net income but here have to use Sales. Here have to use some working: And other thing will remain same as Indirect method.

W-1:

Cash receive from customer:
Sales	000
(-) Increase in a/c receivable	000
(+) Decrease in a/c receivable	000
	000

W-2: Supplier/ account payable

Cost of goods sold	000
(-) Decrease in inventory	000
(+) Increase in inventory	000
(+) Decrease in A/C payable	000
(-) Increase in A/C payable	000
	000

W-3: Cash payment to operating activities:

Operating expense	000
(+)Decrease in accrued expense payable	000
(-)Increase in accrued expense payable	000
(+)Increase in prepaid expense	000
(-)Decrease in prepaid expense	000
	000