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Weis Markets

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Submitted By kgnavarrette
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Karen Navarrete
Weis Markets Inc.
Case 2 A. The statement of cash flows simply provides information on cash coming in and out of the company. The statement of cash flows consists of three different categories: operating, investing, and financing activities by the company that affected the cash flows. The main difference between The Statement of Cash Flows and The Income statement is accrual accounting. Accrual accounting is used when developing income statements because it records revenues and expenses when the transactions occur opposed to the Statement of Cash flows that records them when cash is exchanged. B. The two different methods for preparing income statements are direct and indirect. Weis Markets uses the indirect method, we know because the statement of cash flows starts with the net income. Using the indirect method companies start with the net income and make adjustments to non-cash transactions, then adjusts from all cash based transactions. Most companies use the indirect method because it is easier to reconcile accounts. C. The three sections of the statement of cash flows are operating activities, investing activities and financing activities. D. The three sections of statement of cash flows relate to the balance sheet because the changes in the balance sheet are what’s recorded in the statement of cash flows. E. Cash equivalents are assets/ securities that can be converted into cash. Some examples are short-term government bond, T-bills, and commercial paper. Cash equivalents mature within 90 days. F. The net income is the first in the statement of cash flows for Weis Markets because they are using the indirect method. The reason why the net income is the first item on the statement is that it becomes adjusted for items that affected reported net income but did not affect cash.

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