b) 2. Practice Question 20 To arrive at net cash provided by operating activities using the Indirect method, it is necessary to report revenues and expenses on a cash basis. This is done by a eliminating all transactions that have no current or future effect on cash, such as depreciation, from the net income computation b. re-recording all income statement transactions that directly affect cash in a separate cash flow journal. estimating the percentage of income statement transactions that were originally reported on a cash basis and projecting this amount to the entire array of income statement transactions. d. eliminating the effects of income statement transactions that did not result in a corresponding increase or decrease in cash