Financial Statements Institutional affiliation

timer Asked: Dec 27th, 2017
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Question description

Choose a company from the EDGAR database and then respond to the four questions below. Please make sure to choose any company with consolidated financial statements other than Compaq or GE. Give an opinion on whether you would have used the same method to present the statement of cash flows. What changes would have been made if the company had chosen to use the other method available?

  • Does the firm employ the direct or indirect method of accounting for operating cash flows?
  • How does the firm account for the balances in balance sheet operating accounts (e.g., accounts receivable, inventory, accounts payable) in determining operating cash flows?
  • Describe the accounting for cash paid for business acquisitions in the statement of cash flows.
  • Describe the accounting for any noncontrolling subsidiary interest, acquired in-process research and development costs, and any other business combination–related items in the consolidated statement of cash flows.

EDGAR Database (U.S. Securities and Exchange Commission)

Tutor Answer

School: Carnegie Mellon University

hello, thank you I will be able to work out on this


Financial Statements
Institutional affiliation
In dealing with financial statements, it is very important to understand that both direct and
indirect methods are usually allowed for corporations to use. The traditional accounting system is
considered to have several limitations. The financial accounting standards usually prefer the use
of the direct cash flow in most of the companies that sell stock. This is primarily because it is
easier for the stakeholders to read as compared to the indirect cash flow. However, it does not
matter which of the method you can use provided that yo...

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