1. List the three sections of the Statement of Cash Flows and briefly explain what activities are included in each section.
2. What can creditors, investors, and other users learn from the analysis of the cash flow statements?
3. Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows when using the indirect method.
4. Leather Shop earned net income of $57,000 after deducting depreciation of $5,000 and all other expenses, Current assets decreased by $4,000, and current liabilities increased by $8,000. How much was Leather Shop's cash provided by operating activities (indirect method)?
5. How does the direct method differ from the indirect method?
1. List the three sections of the Statement of Cash Flows and briefly explain what activities are included in each section.
2. What can creditors, investors, and other users learn from the analysis of the cash flow statements?
3. Explain why depreciation expense, depletion expense, and amortization expense are added to net income in the operating activities section of the statement of cash flows when using the indirect method.
4. Leather Shop earned net income of $57,000 after deducting depreciation of $5,000 and all other expenses, Current assets decreased by $4,000, and current liabilities increased by $8,000. How much was Leather Shop's cash provided by operating activities (indirect method)?
5. How does the direct method differ from the indirect method?
