The statement shows cash flows under three different types of business activities; operating activities, investing activities, and financing activities. The operating activities section of the statement of cash flows can be prepared using the direct or indirect method. Under the indirect method, the net income is taken as basis and adjustments are made for non cash and non operating items of find the net operating cash flows. To prepare: the operating activities section of the statement of cash flow using the indirect method.

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Chapter 12, Problem 19E

Summary Introduction

Concept Introduction:

The statement shows cash flows under three different types of business activities; operating activities, investing activities, and financing activities. The operating activities section of the statement of cash flows can be prepared using the direct or indirect method. Under the indirect method, the net income is taken as basis and adjustments are made for non cash and non operating items of find the net operating cash flows.

To prepare:the operating activities section of the statement of cash flow using the indirect method.

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