Capaz Company completed its income statement and balance sheet for 2012 and provided the following information:

In addition, Capaz bought a small service machine for $5,000.
Required:
1. Present the operating activities section of the statement of cash flows for Capaz Company using the indirect method.
2. What were the major reasons that Capaz was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financialanalysts?

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Income Statement for 2012 Service revenue $53,000 Expenses $41,000 Salaries Depreciation Amortization of copyrights Other expenses 7,000 200 9,700 57,900 Net loss $(4,900) Partial Balance Sheet 2012 2011 $ 8,000 Accounts receivable $15,000 Salaries payable 15,000 1,000 Other accrued liabilities 1,000 5,100