KLMW22
May 19, 2009, 10:34 AM
By using the accounts I used to create the income statement and balance sheet, how do I go about finding Capital spending to input it in the cash flow statement?
morgaine300
May 21, 2009, 04:24 PM
It would have to be given elsewhere in the problem. You can look at the differences in the balances on your Balance Sheet, but it doesn't tell you where those numbers came from. For instance, you could have purchased a piece of equipment for $100,000 and also sold another piece of equipment costing $70,000. That nets to a $30,000 increase in the Equipment account. So you can't tell where it came from without looking some place else.
In real life, you would just have records of all these filed somewhere. For the sake of a homework problem, that info could be given anywhere and we don't know where that "anywhere" is. You should either have ledger accounts that show what happened in the accounts, or more commonly, just a list of extra information that you need to do the problem. You'll just to look for it carefully.