Two comparative balance sheets and one income statement become AC116's Unit 10 cash flow statement here, built by the indirect method and proved to the year's change in cash. Searches like "ac 116 unit 10 assignment example", "ac116 unit 10 sample" and "ac116 unit 10 example" land here.
What a finished AC116 Unit 10 cash flow statement looks like
A formal statement headed by the company's name, its title and the fiscal year it covers, followed by three sections. Operating activities starts at net income and adjusts it line by line: depreciation added back, amortization of the bond discount added back, the gain on equipment sold subtracted, then each change in a current asset or current liability, with growth in receivables and inventory subtracted and growth in payables added. Investing activities shows the full cash proceeds from the equipment sale and the cash spent on new equipment. Financing activities lists bonds issued, principal repaid and dividends paid. The three subtotals sum to the net change in cash, which is added to beginning cash and checked against the balance sheet. A short schedule of noncash transactions sits at the foot.
How a AC116 Unit 10 example is structured
Two accounts in the problem each hide more than one event, and the finished sample rebuilds them before drafting the statement. Equipment is reconstructed from beginning cost through purchases and the cost of the machine sold to ending cost, with accumulated depreciation rebuilt beside it, which confirms the sale's book value and the gain. Bonds payable and the related discount are rebuilt the same way, separating new issues from the period's amortization. Only then is every other balance sheet change tagged to a statement line or to the noncash schedule. The statement follows in standard order, and the first few operating adjustments carry a brief note on their sign logic. Below it, the proof ties the net change to the two cash balances, and two sentences compare operating cash with net income and name the items that opened the gap.
Equipment rebuilt
Beginning cost plus purchases less the cost of what was sold gives ending cost; accumulated depreciation is rebuilt beside it. The sale's book value and gain fall out of the two.
Bonds and their discount
New issues separated from amortization, so the cash raised goes to financing and the noncash amortization goes back into operating.
Operating, from net income down
Depreciation and discount amortization added back, the disposal gain removed, then working capital changes, with net receivables carrying the allowance inside them.
Investing and financing
Full proceeds from the equipment sale and cash paid for replacements; bond proceeds, principal repaid and dividends actually paid during the year.
Proof and noncash schedule
Net change added to opening cash equals closing cash from the balance sheet. Equipment acquired by issuing a note appears only in the schedule beneath.
Where marks go in AC116 Unit 10
The gain on the equipment sale is where this statement most often goes wrong. Left inside net income it counts the sale twice, once in operating and again in the investing proceeds, so its subtraction is the first line a grader looks for. Reporting the gain itself as the investing inflow, instead of the full cash received, is the matching error on the other side. Bond discount amortization left out of the operating adjustments understates operating cash by exactly the amortized amount. Sign reversals on working capital changes cost points in every section. Dividends declared but unpaid entered as an outflow lose marks, as does a noncash purchase shown as if cash had moved. A missing reconciliation to the two cash balances costs its own marks.
Get a AC116 Unit 10 example written to your instructions
Everything the statement needs sits in the problem Unit 10 supplies: both balance sheets, the income statement and the notes on equipment, bonds and dividends. Attach those to the instructions and rubric. The working papers and statement come back inside 24-48h, proved to cash, and a first custom sample is free.
AC116 Unit 10 questions, answered
Why is the change in receivables taken net of the allowance?
Because bad debt expense reduced net income without any cash leaving, and the allowance that rose with it sits inside the net receivable. Using the change in net receivables captures both effects in one line, which is how most AC116 problems expect it. Subtracting the gross change while also adding back bad debt expense needs extra care, and the sample avoids mixing the two.
Why is bond discount amortization added back?
Because it raised interest expense without any cash leaving. The cash paid for interest is the stated rate times face; the expense recorded was higher by the amount of discount amortized. Adding that difference back restores operating cash to what actually moved. A premium works the other way, and its amortization is subtracted, since the cash paid exceeded the expense recorded.
What goes in the noncash schedule?
Investing and financing events that moved no cash but changed the balance sheet, such as equipment bought by signing a note or bonds converted into stock. They are left out of the three sections, since no cash moved, and reported beneath the statement so a reader still sees the transaction. Problems in this unit often include one to test exactly that placement.