Question: The SCF for Wave Electronics Limited using the indirect method

The SCF for Wave Electronics Limited, using the indirect method of presentation for operating activities, is shown below.

1. Some of the items included in operating activities, above, may be presented in other sections of the SCF. Explain the alternatives open to the company. What alternative is open for dividends paid, now in financing activities?
2. Redraft the SCF, reclassifying all items identified in requirement 1 into sections other than operating activities.
3. Return to the SCF as presented in the question. Redraft the SCF, classifying interest and dividends paid in operating activities.
4. Explain why the presentation prepared in requirement 2 or 3 may bepreferable.
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  • CreatedFebruary 17, 2015
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