Consolidating two balance sheets
In order to analyze the financial statements for a business, more information is needed from the balance sheets.Here's the rule you should always remember when developing your Statement of Cash Flows: Increases in current asset accounts, decrease cash.Decreases in current asset accounts, increase cash.Dividends to investors in the amount of $65,000 have also been paid, which is a cash outflow and a negative number.
Net Cash Flows from Financing Activities is a negative $15,000.
The owner must look at the last two years of the firm's balance sheets and compare the differences between the two in order to develop the Statement of Cash Flows.
Consolidating two balance sheets comments