Kimmel Financial Accounting Solutions Ch12 Essay

Words: 7821
Pages: 32

CHAPTER 12

Statement of Cash Flows

Study Objectives

1. Indicate the usefulness of the statement of cash flows. 2. Distinguish among operating, investing, and financing activities. 3. Explain the impact of the product life cycle on a company’s cash flows. 4. Prepare a statement of cash flows using the indirect method. 5. Use the statement of cash flows to evaluate a company.
*6. Prepare a statement of cash flows using the direct method.

Summary of Questions by Study Objectives and Bloom’s Taxonomy

|Item |
| 1.
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|2B | |Determine cash flow effects of changes in plant asset | |Simple | |10–15 |
| | |accounts. | | | | |
| | | | | | | |
|3B | |Prepare the operating activities section—indirect method. | |Simple | |20–30 |
| | | | | | | |
|*4B | |Prepare the operating activities section—direct method. | |Simple | |20–30 |
| | | | | | | |
|5B |