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13 October, 19:44

Indicate how each item should be classified in the statement of cash flows using these four major classifications: operating activity (that is, the item would be listed among the adjustments to net income to determine net cash provided by operating activities under the indirect method), investing activity, financing activity, and significant noncash investing and financing activity.

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  1. 13 October, 20:13
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    Indicate how each item should be classified in the statement of cash flows using these four major classifications

    Explanation:

    Cash flows from operating activities

    Profit before taxation

    Adjustments for:

    Depreciation

    Investment income

    Interest expense

    Profit / (Loss) on the sale of property, plant & equipment

    Working capital changes:

    (Increase) / Decrease in trade and other receivables

    (Increase) / (Decrease) in inventories

    Increase / (Decrease) in trade payables

    Cash generated from operations

    Interest paid

    Income taxes paid

    Dividends paid

    Net cash from operating activities

    Cash flows from investing activities

    Business acquisitions, net of cash acquired

    Purchase of property, plant and equipment

    Proceeds from sale of equipment

    Acquisition of portfolio investments

    Investment income

    Net cash used in investing activities

    Cash flows from financing activities

    Proceeds from issue of share capital

    Proceeds from long-term borrowings

    Payment of long-term borrowings

    Net cash used in financing activities
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