Question: The income statement of Kneale Transport Inc for the year

The income statement of Kneale Transport Inc. for the year ended December 31, 2014, reported the following condensed information:
Kneale's statement of financial position contained the following comparative data at December 31:
Additional information:
Operating expenses include $70,000 in depreciation expense. The company follows IFRS. Assume that interest is treated as an operating activity for purposes of the cash flow statement.
Instructions
(a) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, using the indirect method.
(b) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, using the direct method.
(c) From the perspective of a user of Kneale Transport’s financial statements, discuss the usefulness of the statement of cash flows prepared using the indirect method versus the direct method.


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  • CreatedSeptember 18, 2015
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