The statement of income of Kneale Transport Inc. for the year ended December 31, 2017, reported the
Question:
The statement of income of Kneale Transport Inc. for the year ended December 31, 2017, reported the following condensed information:
Kneale's statement of financial position included the following comparative data at December 31:
Additional information: Operating expenses include $70,000 in depreciation expense. The company follows IFRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows.
Instructions
(a) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, using the indirect method.
(b) From the perspective of an external user of Kneale Transport's financial statements, discuss the usefulness of the statement of cash flows prepared using either the indirect or the direct method.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119048534
11th Canadian edition Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy