What is the difference between the indirect and direct style of the statement of cash flows?

The direct method is used by more companies.

The direct method reports actual cash inflows and outflows in CFI and CFF.

The direct method is considered easier to read.

The direct method started with net income and adjusts it to calculate CFO.

Question 2

1. The shortcut for determining how to convert from accrual to cash when creating a statement of cash flows is similar to which other shortcut we used this semester?

   The shortcut for determining the conversion from GAAP to tax line items.

   The shortcut for determining the conversion from Contract Liability to Sales Revenue.

   The shortcut for determining the conversion of corridor smoothing to pension expense.

   The shortcut for determining the conversion from LIFO to FIFO Retail Inventory Method.

   During Year 5, Stout Inc. made a cash payment of $186,000 on dividends declared in Year 4 and paid $2,650,000 to retire $2,620,000 of long-term bonds payable early. The company also sold treasury stock purchased for $258,000 for $300,000 and had $360,000 of preferred stock converted into shares of common stock. Based on this information, what was Stout's net cash flows from financing activities for Year 5?

   		$2,548,000
   		$2,536,000
   		$1,990,000
   		$2,176,000