Question: Explain why the indirect method of preparing cash flows from
Explain why the indirect method of preparing cash flows from operating activities is also known as the reconciliation method.
Answer to relevant QuestionsExplain why it is important to a company’s financial health to have a positive cash flow from operations. Financial statement data for Metro Moving Company for 2016 follow. Additional information: 1. Vehicles that cost $65,000 and had a net carrying amount of $10,000 were sold for $14,000. 2. A cash payment was made to reduce ...Southbend Company had sales of $734,000 for the year. The company reported accounts receivable of $54,000 at the end of last year and $60,000 at the end of this year. Southbend’s cost of goods sold this year was $440,000. ...The following transactions occurred for Dussault Ltd. 1. Annual interest of 6% is paid on $500,000 of bonds payable that were issued last year. 2. A truck was purchased for $50,000 at the beginning of this year. The truck is ...As a lender, discuss whether you would be satisfied with the current method of classifying cash flows into only three categories. In addition, discuss the normal treatment of interest expense within the statement of cash ...
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