Respond to the following in a minimum of 175 words and include reference for each question answered. Be constructive and professional in your responses
#1A statement of cash flows classifies cash receipts and cash payments into what three categories of activity? For each category of activity, share two specific examples of both cash receipts and cash payments based on two different business scenarios of your choosing. The business scenarios you choose can be based on real or fictional companies. For example, if you chose Uber and the fictional MarksABunch Art Supplies company, you would share six examples of cash receipts and cash payments per company, each broken out into one of the three different categories of activity presented in a statement of cash flows.
#2. The statement of cash flows classifies cash receipts and payments into three categories which are operating, investing and financing. Operating “include cash activities related to net income” (3 types of cash) An example of this is cash generated from the sales as well as cash paid for merchandising. Investing is “include cash activities related to non-current assets” (3 types of cash).An example of this is long term investments as well as property, plant and equipment. Financing activities “include cash activities related to non-current liabilities and owners’ equity” (3 types of cash). An example of this is stock sales and repurchases as well as dividend payments. For two types of companies that I am choosing are Nike as well as uber. When Nike purchases inventory it would be under investing. When they obtain cash from their creditors it would be financing and when they receive interest on loans it would be operating. Now for Uber it would be financing when they sale equity securities. The operating could be when they pay taxes to the government and when they are investing it could be to purchase property.
Three Types of Cash Flow Activities, saylordotorg.github.io/text_managerial-accounting/s16-02-three-types-of-cash-flow-activ.htm
#3. The three classifies are Operating activities, Investing activities, and Financing activities. Operating activities are activities that change the amount of cash within the company with an operating expense or change such as an increase to the account receivable or a decrease to the accounts payable. Investing activities is when a company makes a purchase or sales an investment. These can be a purchase of equipment or land or even a building, it can also be a sell of the same things owned by the company. Financing activities are when the company makes a change in a stock or bond. This could be the redemption of bonds or a payment of cash dividend. Anheuser-Busch has the same operating expenses all over the country which can be any depreciation expenses on equipment or a decrease in inventory. The investing activities would be things such as buying a new delivery truck or selling an older forklift. The financing activities would be a decrease in the amount owed on loans or cash paid to dividends. Wal-Mart can have the operating activities of an increase in accounts payable and an increase in accounts receivable. The investing activities would be considered buying a new building or selling an unused building. Financing activities are the issuance of common stocks and the purchase of treasury bonds.