Lesson 12

 Dear Prof. Sue Garreis

Thank you for your 11th message. My reply is in Bookman Old Style. My homework is at the bottom of my email.

⇒It was the best party of my life. My daughter really knows how to throw a good party! I doubt that I will have another party like that one. You asked what I wanted to do in the future. Staying in good health is certainly a focus of my life now. So I eat less junk food and more healthy stuff.  Well, much of time. I ate six donuts today! There was a fund-raising bake sale at my church. I couldn't turn that down! ("Couldn't turn it down" is an expression that means one could not pass up that opportunity.)

When I am starved, I also eat that much. I think you sometime eat your favorite foods as much as you like rather than put up with. Now I am running twice a week because of health. Though it is painful to run in summer, I feel running to be easy recently.

⇒When I went to Japan in 1987, I went to Shinjuku. It was very nice! By the way, we say the year as follows: nineteen eighty-seven. The current year is pronounced two thousand ten by many. Others say the current year as twenty ten.

We also say as you say. But we hardly say the current year as twenty ten.

⇒Thank you for showing me the TOEIC web site. Have you taken the TOEIC Bridge test already? I wondered whether many people end up taking both tests.

I had taken the TOEIC Bridge test already. As I'm going to take many times, I take the test again this month.  

⇒Tohmatsu is a very good firm. I hope you are able to work for them someday. Stick with your dreams. They may come true sooner than you think! I am sorry that you have to find a job in this bad economy. Keep persisting. Something good will come from this. Do you have to be a CPA of Japan before you can be a US CPA? Does Tohmatsu expect you to be both? I think the Japanese CPA is harder than the US CPA.

 I hope so! Now the accountants (They have the qualification of CPA) are overstuffed. So if I can have the qualification of Japan, I may not be a CPA. Japan will adopt IFRS by 2015. Then the firms as Tohmatsu will expect to be both because IFRS is writing in English in the near future. Japanese accounting standards is so particular. So we must know about our accounting standards, even if Japan will adopt IFRS. Because it is not easy to change all our accounting standards sooner. Now as Japanese accountants are not good at English, they must study English. Of course, me too. Japanese accountants must know IFRS and Japanese accounting standards, and study English. I am anxious about our future.

⇒Mei, this week's lesson is about the Statement of Cash Flows: http://msgarreis.com/cashflow10.htm. This is the third financial statement.
Prof.Shina and Prof. Kaneko explained me how Statement of Cash Flows are important for the company many times. In Japanese bookkeeping as BATIC, it hardly explain about Statement of Cash Flows when we study accounting. So I'm very pleased to have the opportunity to learn about C/F this time.  

⇒This past week was an interesting one for me. It was full of the joys of home ownership. There is a lot of sarcasm in that last sentence! We got a lot of rain from Tropical Storm Nicole. On Thursday nine inches (twenty-three centimeters) fell in a twenty-four hour period. That was the most rain in one storm in quite a long time! The ground became saturated. Since it had no where else to go, it leaked into my basement. Fortunately, I happened to walk down to the basement and discover the puddles on the floor. This is not the first time the basement has flooded. So I hooked up the wet-dry vac (a vacuum cleaner that can suck up dry dirt as well as water). It enabled me to keep ahead of the water flowing into the basement. Most of the stuff in the basement was up on shelves with wheels. I could move the shelf out of the way to get at the water underneath. There is a dehumidifier (a wonderful machine that removes the water vapor from the air) and it worked constantly! After the rain slacked off and the flow lessened I put towels near the hot spots to soak up the water as it entered. Today my son drove down from Delaware to apply some patch material to the basement walls where the water leaked in. It is raining again, but the patching material is largely holding. The towels are sufficient to soak up the drops that come in from one place in particular. Whew! It will rain tomorrow also. Then I hope it stops for at least a week. The weather is crazy now. We go for such long spells without rain, and then we are pounded with more than we can handle. Global warming, perhaps. Have a great week.

That too bad. Are you all right? In Japan, we often get some rain now, but it is not so crazy as your area. In your area, are the sewage arrangements at this housing site  complete? Be careful!!

Homework

1.	Why is the Statement of Cash Flows important to U.S. users of accounting information?  In case of investors, in particular, stockholders want the main business of the company to increase cash, because stockholders want more dividends. C/F informatio helps stockholders predict if the company can pay dividends and be the long term health. In creditors, the lender want to loan money the borrower because the interest is paid monthly. But the lender can't loan everyone as it is not clear whether the borrower certainly pay off the loan. So C/F information helps creditors decide if the borrower can repay the loan.
2.	Look at the table that compares the direct and indirect methods. What is the main difference between the indirect and direct methods:
	a.	in operating activities? In the direct methods, it independently analyzes the changes that cash transactions cause in each balance sheet non-cash account. In the indirect methods, it starts with Net Income on the Income Statement. Cash transactions omitted from income are added. Non-cash transactions included in income are removed. This is called a "Reconciliation to Net Income."
	b.	in investing activities? It's no difference.
	c.	in financing activities? It's no difference.
3.	How do Japanese companies report their changes in cash during the year? Japanese companies also use Statement of Cash Flows. But it may come under only big companies, though.

4.	How easy was this lesson for you?
	The accounting was:		The English was:		Getting to and using the linked web pages was:
		Very easy	〆	Very easy	〆	Very easy
	〆	Somewhat easy		Somewhat easy		Somewhat easy
		About right		About right		About right
		Somewhat hard		Somewhat hard		Somewhat hard
		Very hard		Very hard		Very hard

 

 

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