Cash flow statement urgent query

Cash Flow Statement is the mandatory for the Corporate Sector & generally Drawing is not made in the corporate sector.

Drawing in case of proprietorship company, firms & withdrawn by proprietor / partner effect the company B/S & through the reduction of assets ( cash reduction in case of cash withdrawn, other asset reduction in cash of specific assets withdrawn) & reduction of owner equity.

If Drawing in not regular activities, DRAWING reported as FINANCIAL Activities & use as OUTFLOW of cash (if other asset withdrawn except cash, it's not a part of CASH FLOW STATEMENT, it's reported as Supplementary Notes on the Statement of Cash Flow).

If Drawing is not regular activities, it's not reported as OPERATING ACTIVITIES, because it's treated as REMUNERATION or OWNER LOAN. Owner provide CAPITAL, when owner takes LOAN from business, it's reported under FINANCIAL ACTIVITIES.

In cash of withdrawn regularly, it's better to reported as OPERATING ACTIVITIES.

Income Statement does not effected by withdrawn by the owner / partner

Dear Tanuj,

Drawings from the business is purely of capital outflow. It is not connected with operations of the business in whatsoever manner whether the drawing is regular or irregular. Therefore, it shall be shown only under financing activity.

1st follow my previous note...........

Originally posted by : Pijush Roy
	Cash Flow Statement is the mandatory for the Corporate Sector & generally Drawing is not made in the corporate sector. Drawing in case of proprietorship company, firms & withdrawn by proprietor / partner effect the company B/S & through the reduction of assets ( cash reduction in case of cash withdrawn, other asset reduction in cash of specific assets withdrawn) & reduction of owner equity. If Drawing in not regular activities, DRAWING reported as FINANCIAL Activities & use as OUTFLOW of cash (if other asset withdrawn except cash, it's not a part of CASH FLOW STATEMENT, it's reported as Supplementary Notes on the Statement of Cash Flow). If Drawing is not regular activities, it's not reported as OPERATING ACTIVITIES, because it's treated as REMUNERATION or OWNER LOAN. Owner provide CAPITAL, when owner takes LOAN from business, it's reported under FINANCIAL ACTIVITIES. In cash of withdrawn regularly, it's better to reported as OPERATING ACTIVITIES. Income Statement does not effected by withdrawn by the owner / partner

Operating Activities: - Operating activities are those activities which are recurring in nature & normal business activities.

Financial Activities: - Financial activities are those activities which are non-recurring in nature & not normal/daily business activities

There is some partnership or proprietorship firm which owner/partner withdrawn cash/assets per month according to their partnership deed. Sometimes they pay interest on such drawing. It's treated as their remuneration. It's recurring in nature & normal business activities. From this point of view, if drawing made in every month or after fixed time interval, it's operating activities, not financial.

n financial accounting, a cash flow statement, also known as statement of cash flows orfunds flow statement,^[1] is a financial statement that shows how changes in balance sheetaccounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. 

[url="www.settlement-cash-structured-for-flow.com"]settlement-cash-structured-for-flow[/url]

what should be done when pnl appropriation account is given in comparative balancesheet.. pls help me out........wat should be done for share in subsidiary ... what should be effected for these items.............

:-D

it will shown under the head finance activity as capital outflow

what should be dne for p n l appropriation account 

I would like to discuss point wise all the issues raised in the thread above.

1. Drawings -  I think since drawings in a proprietory/partnership firm are done against the profits being earned, hence they should be treated as financing activity as is dividend paid treated in case of companies.

2. In case P&L Appropriation Account is given, you take the difference between the two dates and add to this whatever appropriations have been made like drawings, interest paid on capital etc. and proceed in the same manner as you proceed in case profit *& Loss A/c is given.

3. Share in a subsidiary should be shown as Investing Activities and not as financing activity because the shares held in a subsidiary are shown in the balance sheet as an asset.

I am attaching a link of my small clip on Accounting Equation for your kind FEEDBACK.

https://www.youtube.com/watch?v=_aSmU3Q-dX4

i saw ppt regarding cashflow they put that share in subsidiary should not be shown as it is not between the company and investor in the companies ....................is that point okay ...do u agree with that