As noted in the previous section, Sunbeam engaged in various improper accounting practices. Refer to the excerpt from Sunbeam’s statement of cash flows in Exhibit 24 to answer the following questions:

1. One of the ways that Sunbeam misreported its financial statements was improperly inflating and subsequently reversing restructuring charges. How do these items appear on the statement of cash flows?

2. Another aspect of Sunbeam’s misreporting was improper revenue recognition. What items on the statement of cash flow would primarily be affected by that practice?

Note: The reason that an increase in sales is shown as a negative number on the statement of cash flows prepared using the indirect method is to reverse any sales reported in income for which cash has not yet been received.

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EXHIBIT 24 Excerpt from Sunbeam's Consolidated Statement of Cash Flows, 1995-1997 ($ thousands) Fiscal Years Ended Operating Activities: Net earnings (loss) Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization Restructuring, impairment, and other costs Other non-cash special charges Loss on sale of discontinued operations, net of taxes Deferred income taxes Increase (decrease) in cash from changes in working capital: Receivables, net Inventories 28 Dec. 1997 109,415 38,577 13,713 57,783 (84,576) (100,810) 29 Dec. 1996 (228,262) 47,429 154,869 128,800 32,430 (77,828) (13,829) (11,651) 31 Dec. 1995 50,511 44,174 25,146 (4,499) (4,874)