Chapter 16, Problem 16.1EX

To determine

Statement of cash flows:

It is one of the financial statement that shows the cash, and cash equivalents of a company for a particular period. It determines the net changes in cash through reporting the sources and uses of cash due to the operating, investing, and financing activities of a company.

Cash flows from operating activities:

These refer to the cash received or cash paid in day-to-day operating activities of a company.  In this direct method, cash flow from operating activities is computed by using all cash receipts, and cash payments during the year.

To explain: The apparent contradiction between the loss, and the positive cash flows.