Accounting 102 Discussion Questions

Instructions

1. What are the major advantages of the indirect method of
reporting cash flows from operating activities?
2. A corporation issued $200,000 of common stock in
exchange for $200,000 of fixed assets. Where would this
transaction be reported on the Statement of Cash Flows?

3. A corporation issued $5,000,000 of 20 year bonds for
cash at 105. How would the transaction be reported on the
Statement of Cash Flows?

4. Is depreciation a source of cash flow?

5. When astatement of cash flows is prepared using the direct method, what are some of the operating cash flows?