Hi there! If there had been depreciation expense, yes, that would have been added back in the CFO section. The only information about depreciation in this problem was the accumulated depreciation on the sold building, which could have been expensed and accumulated in a prior period. Absent anything to the contrary, it was safe to assume depreciation expense for this problem was $0.
@The Accounting Prof Thank you so much for your response. I love your lectures. I am interviewing for a Corporate Accounting Manager and I am polishing up on my advanced Accounting and Financial statements (particularly consolidated statements and eliminating entries). I am a CPA and I take pride in dealing a good job at work. It is lectures like yours that help me to understand topics that I might have forgotten. Thanks again, Sylvia
@@sumankhadka9781 Taxes are part of operations, but dividends would be considered a financing activity since they are an exchange with the shareholders.
@@TheAccountingProf When the Opening and Closing Balance of Income Tax Provision is given in the question.What effect does it have in Operating activities.Some says opening balance should considered as income tax paid.While other says difference between opening and closing balance is non cash liability and income.What is it sir please explain it sir? Its urgent sir
since there was accumulated depreciation for the building sale but no other sign of accumulated depreciations, you do not add depreciation expense in the operating activi3es correct?
Hi there! Yes, since there was nothing to indicate depreciation expense in the current year, there is nothing to add back in the operating section. The accumulated depreciation on the sold building could have been expensed and accumulated in a prior period, so we do not assume it happened in the current period unless depreciation expense is explicitly stated in the problem.
Hi! No, that is not typically a line item on a statement of cash flows. Income, whether before or after taxes, is a revenue-based number that may co-mingle cash and non-cash activities. In the Indirect Method Statement of Cash Flows, net income is used as a starting point for operating cash flows, but the non-cash activity is then removed from it.
Good job, but too many assumptions in PPE, As I have understood, the main idea is to get the CHANGES (+ or -) that have cash transactions. As for PPE , the book value decreased for 10 and created 60 as gain. But initial values not clear, are they book (net) value or accusition value
Sir please help with this one. year. 2017 Plant Net 1540,000 year 2018 Plant Net 30,80,000 And in Income statement we have Depreciation 20,000 Book value 120,000 loss on sale of plant 20,000 Please help me with this one
Thank you very much sir! Within just 20 mins, you helped me understand and digest what took me 2 days to learn ❤🙏 God bless you sir.
Thanks alot sir
Love from Pakistan 🇵🇰
This is an excellent tutorial. I love how you plugged Dividends. I feel like I missed Depreciation, shouldn't add it back into cash?
Hi there! If there had been depreciation expense, yes, that would have been added back in the CFO section. The only information about depreciation in this problem was the accumulated depreciation on the sold building, which could have been expensed and accumulated in a prior period. Absent anything to the contrary, it was safe to assume depreciation expense for this problem was $0.
@The Accounting Prof Thank you so much for your response. I love your lectures. I am interviewing for a Corporate Accounting Manager and I am polishing up on my advanced Accounting and Financial statements (particularly consolidated statements and eliminating entries). I am a CPA and I take pride in dealing a good job at work. It is lectures like yours that help me to understand topics that I might have forgotten. Thanks again, Sylvia
@@TheAccountingProf sir does provision for tax and proposed dividend comes in operating activities
@@sumankhadka9781 Taxes are part of operations, but dividends would be considered a financing activity since they are an exchange with the shareholders.
@@TheAccountingProf When the Opening and Closing Balance of Income Tax Provision is given in the question.What effect does it have in Operating activities.Some says opening balance should considered as income tax paid.While other says difference between opening and closing balance is non cash liability and income.What is it sir please explain it sir? Its urgent sir
since there was accumulated depreciation for the building sale but no other sign of accumulated depreciations, you do not add depreciation expense in the operating activi3es correct?
Hi there! Yes, since there was nothing to indicate depreciation expense in the current year, there is nothing to add back in the operating section. The accumulated depreciation on the sold building could have been expensed and accumulated in a prior period, so we do not assume it happened in the current period unless depreciation expense is explicitly stated in the problem.
❤🎉
Thank you! I've learned a lot from you!
Is income before taxes included in cash flow?
Hi! No, that is not typically a line item on a statement of cash flows. Income, whether before or after taxes, is a revenue-based number that may co-mingle cash and non-cash activities. In the Indirect Method Statement of Cash Flows, net income is used as a starting point for operating cash flows, but the non-cash activity is then removed from it.
Good job, but too many assumptions in PPE,
As I have understood, the main idea is to get the CHANGES (+ or -) that have cash transactions. As for PPE , the book value decreased for 10 and created 60 as gain. But initial values not clear, are they book (net) value or accusition value
you sounded like sheldon cooper, sir 😅😊
Sir please help with this one.
year. 2017
Plant Net 1540,000
year 2018
Plant Net 30,80,000
And in Income statement we have
Depreciation 20,000
Book value 120,000
loss on sale of plant 20,000
Please help me with this one
very perplexing 🥲