The Four Cash Flow Categories Required in an Enterprise Fund's

question 40

Essay

The four cash flow categories required in an Enterprise Fund's Statement of Cash Flows are listed below and assigned a letter code.
A)Cash flows from operating activities
B)Cash flows from noncapital financing activities
C)Cash flows from capital and related financing activities
D)Cash flows from investing activities
Required:
Use the correct letter code to indicate where each of the following ten items associated with an Enterprise Fund should be reported in the Statement of Cash Flows.
1.An enterprise fund's fixed asset was sold for cash.
2.Cash paid to suppliers for goods.
3.Paid principal,$100,000,and interest,$5,000,on a mortgage.
4.Cash proceeds from sale of investments,$65,000.
5.Cash paid for new equipment,$18,000.
6.Cash received from the general fund; restricted to cover part of the cost of plant expansion,$900,000.
7.Cash received from another fund as a 6-month loan for the sole purpose of financing purchase of equipment,$47,000.
8.Cash proceeds from issuing bonds for an enterprise fund's construction project.
9.Cash paid to employees for salaries.
10.Cash received from interest earned on investments.

• A)Cash flows from operating activities
• B)Cash flows from noncapital financing activities
• C)Cash flows from capital and related financing activities
• D)Cash flows from investing activities
• Required:
• Use the correct letter code to indicate where each of the following ten items associated with an Enterprise Fund should be reported in the Statement of Cash Flows.
• 1.An enterprise fund's fixed asset was sold for cash.
• 2.Cash paid to suppliers for goods.
• 3.Paid principal,$100,000,and interest,$5,000,on a mortgage.
• 4.Cash proceeds from sale of investments,$65,000.
• 5.Cash paid for new equipment,$18,000.
• 6.Cash received from the general fund; restricted to cover part of the cost of plant expansion,$900,000.
• 7.Cash received from another fund as a 6-month loan for the sole purpose of financing purchase of equipment,$47,000.
• 8.Cash proceeds from issuing bonds for an enterprise fund's construction project.
• 9.Cash paid to employees for salaries.
• 10.Cash received from interest earned on investments.

---

Definitions:

Tax Depreciation

The deduction of a tangible asset's cost over its expected life span, used to reduce taxable income.

Book Depreciation

The method of allocating the cost of a tangible asset over its useful life for accounting and tax purposes.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, and other factors.

Current Tax Expense

The amount of income taxes a company is expected to pay in the current year, reflecting its taxable earnings.