a. Prepare the operating activities section of the statement of cash flows using the indirect method.

b. As a creditor what would you consider to be an alarming trend that is revealed by the statement that you have prepared is this trend as easy to notice under the direct method as inE22-10.

Vincus distributing Income Statement for the Year ended December 31,2008 Particulars Sales Cost of Goods sold Beginning inventory Purchases Goods available for sale Ending Inventory cost of goods sold Gross profit Operating expenses Selling expenses Administrative expenses Net income Amount Amount S 6,900,000 S 1.900.000 S 4,400,000 S 6,300,000 S 1,600,000 S 4,700,000 S 2,200,000 S 450,000 S S 1,150,000 S 1,050,000 700,000