Lesson Plan 6.2 – Statement of Cash Flow
Course Title: Accounting II
Lesson Title: Understanding Business Information
Specific Objective: Apply the principles, concepts, and applications related
to the understanding of Cash Flow Reports.
Performance Objectives:
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Explain the purpose of the statement of cash flows;
Identify types of cash flows reported on the statement of cash flows;
Analyze information needed to prepare the statement of cash flow;
Determine cash flows from operating activities;
Determine cash flows from investing activities;
Determine cash flows from financing activities;
Prepare a statement of cash flows;
Prepare a schedule of non-cash investing and financing transactions;
Define accounting terms related to the lesson.
TEKS: 130.167.c.2:
G – complete a work sheet for a corporation;
H – generate an income statement for a corporation;
I – develop a statement of equity for a corporation;
J – produce a balance sheet for a corporation.
TAKS: R1, M10
Preparation
Materials Needed:
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Projection system
Glencoe’s Textbook, Chapter 13, and Demonstration Problems
Century 21’s Textbook, Chapter 17
Accounting software and spreadsheet software.
Sponge/Focus Activity:
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Exploring the Real World of Business, in Glencoe’s Textbook
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A possible end of class activity is to give each student a 3 x 5 card and give
them several minutes to answer the following question:
o ―What is the most important item you learned today?‖ Have them turn in
the 3 x 5 card before they leave class. (You can use this activity
whenever you want feedback on what your students learned.)
Lesson Content:
See Glencoe’s Textbook, Chapter 13, or Century 21’s Textbook, Chapter 17.
Here is an outline:
I.
Understanding cash flows
Lesson Plan 6.2 – Statement of Cash Flow
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
II.
III.
A. Cash inflows and outflows
1.
Cash flows from operating activities
2.
Cash flows from investing activities
3.
Cash flows from financing activities
Preparing the statement of cash flows—operating activities
A. The Statement of cash flows
1.
The Heading
2.
The cash flows from operating activities section
i.
Cash receipts from sales to customers
ii.
Cash receipts from interest income
iii.
Cash payments for purchases
iv.
Cash payments for operating expenses
v.
Cash payments for Interest expense
vi.
Cash payments for income tax expense
Completing the statement of cash flows
A. The cash flows from investing activities section
1.
Purchases of marketable securities
2.
Purchases and sales of plant assets
B. The cash flows from financing activities
1.
Cash flows from short-term borrowing
2.
Cash flow from long-term borrowing
3.
Cash receipts from issuing capital stock
4.
Cash dividends payments to stockholders
C. The Schedule of non-cash investing and financing transactions
Teaching Strategies:
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Glencoe’s Demonstration Problems.
With the Century 21 textbook, complete the Work Together problems with
your students then have students work On Your Own problems by
themselves and go over the answers with the class.
Assessment:
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For problems you can use Peachtree Accounting from Glencoe, Glencoe
Accounting Software, Century 21 Accounting Software, or a spreadsheet.
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From Glencoe’s Textbook Problems
o Guided Practice
 13-1 Analyzing the Statement of Cash Flows
 13-2 Determining Cash Payments for Operating Expenses
 13-3 Analyzing a Source Document
o Independent Practice
 13-4 Preparing the Cash Flows from Investing Activities
Section of the Statement of Cash Flows.
 13-5 Preparing the Cash Flows from Financing Activities
Section and the Schedule of Non-cash Investing and
Financing Transactions.
 13-6 Preparing the Heading and the Cash Flows from
Lesson Plan 6.2 – Statement of Cash Flow
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
Operating Activities Section.
13-7 Preparing the Cash Flows from Investing Activities
Section
 13-8 Preparing the Cash Flows from Financing Activities
Section
 13-9 Preparing the Schedule of Non-cash Investing and
Financing Transactions
 13-10 Preparing a Statement of Cash Flows
 13-11 Preparing a Statement of Cash Flows
o Additional Activities
 Using Key Terms, Understanding Accounting Concepts and
Procedures, Case Study, Conducting an Audit with Alex,
Internet Connection and Workplace Skills
o Open Notes and textbook Quiz: Study Guide for Chapter
From Century 21’s Textbook
o Guided Practice
 Work Together: Classifying cash flows
 On Your Own: Classifying cash flows
 Work Together: Preparing the operating activity section for a
statement of cash flows
 On Your Own: Preparing the operating activity section for a
statement of cash flows.
 Work Together: Preparing the investing and financing
activities sections from the statement of cash flows;
completing the statement of cash flows
 On Your Own: Preparing the investing and financing
activities sections from the statement of cash flows;
completing the statement of cash flows
o Independent Practice
 17-1 Classifying cash flows
 17-2 Calculating the cash flows from operating activities
 17-3 Calculating the cash flows from investing activities
 17-4 Calculating the cash flows from financing activities and
completing a statement of cash flows
 17-5 Preparing a statement of cash flows
 17-6 Preparing a statement of cash flows
o Additional Activities: Applied Communication, and Cases for
Critical Thinking
o Open Notes and textbook Quiz: Study Guide for Chapter
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This lesson is also assessed through the Unit Test at the end of the Unit.
Additional Resources:
Textbooks:
Lesson Plan 6.2 – Statement of Cash Flow
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II
Guerrieri, Donald J., F. Barry Haber, William B. Hoyt, and Robert E. Turner,
Glencoe Accounting Real-World Applications & Connections, Advanced
Course, Fourth Edition, Glencoe McGraw-Hill: New York, New York.
Ross, Kenton E., CPA, Mark W. Lehman, CPA, Claudia Bienias Gilbertson, CPA,
Robert D. Hanson, Century 21 Accounting Advanced, Anniversary Edition,
Thomson South-Western: Mason, OH, 2003.
Multimedia:
Century 21’s Teacher Resource CD
Lesson Plan 6.2 – Statement of Cash Flow
Copyright © Texas Education Agency, 2011. All rights reserved.
ACCOUNTING II