You have been asked to prepare a statement of cash flows using the balance sheet provided in Exhibit I , the income statement in Exhibit II , and the extracts from the notes provided in Exhibit III . Assume that the term deposits are cash equivalents. Further assume that CompuCo elects to report both the payment and collection of interest as operating activities.

Required:
1. Use the indirect method to prepare a statement of cash flows for 2015 on a non comparative basis in good form from the information provided.
2. Use the direct method to prepare the cash flows from operations section of the statement of cash flows for 2015.
3. What are the objectives of a statement of cash flows prepared in accordance with generally accepted accounting principles?

CompuCo Ltd.
Extracts from Notes to Financial Statements
F or the Year Ended December 31

1. Investments
The company€™s investments at December 31 are as follows:

                                                                                                                             2015                             2014
                                                                                                                                            (in $000€™s)
XYZ Inc. (market value 2015, $8.3 million)                                                                                                      
Shares .......................................................................................................... $ 5,962                           $ 5,962

2. Property, plant, and equipment (PPE)
Additions to PPE for the current year amounted to $2.29 million and proceeds from the disposal of PPE amounted to $250,000.
3. Development costs
Development costs for a product are amortized once the product is ready for market. The rate depends on the expected life of the product.
4. Long-term debt

Debentures bear interest at 12% per annum and are due in 2018. Bank term loans bear interest at 8% and the bank advanced $2.2 million during the year.
5. Share capital
On May 14, 2015, CompuCo Ltd. issued 3.8 million shares with special warrants. Net proceeds from issuing 3.8 million shares amounted to $14.393 million. Net proceeds from issuing 3.8 million warrants amounted to $899,000. On December 31, 2015, a stock dividend of $1 million was issued.

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Exhibit I CompuCo Ltd. Extracts from Consolidated Balance Sheet As at December 31 ($000's) 2015 2014 Assets Current $ 3,265 Cash and term deposits $ 3,739 Accounts receivable 23,744 18,399 Inventories 26,083 21,561 Income taxes recoverable 145 Prepaid expenses 1,402 1,613 54,639 45,312 Investments (note 1) 5,960 6,962 Property, plant, and equipment (note 2) 37,332 45,700 Deferred income taxes 2,245 4,875 Goodwill 12,737 Development costs (note 3) 1,911 4,391 $107,197 $114,867 Liabilities Current $ 6,844 $ 6,280 Bank indebtedness Accounts payable 3,243 4,712 Current portion of long-term debt 1,800 1,200 11,887 12,192 Long-term debt (note 4) 14,500 14,900 Total liabilities 26,787 26,692 Exhibit I Continued CompuCo Ltd. Extracts from Consolidated Balance Sheet As at December 31 ($000's) 2015 2014 Shareholders' equity Share capital (Note 5) 79,257 62,965 Retained earnings 1,153 25,210 Total shareholders' equity 80,410 88,175 $107,197 $114,867