A company has a net cash inflow from operating activities of $795,000, a net cash outflow of $62,000 from investing activities and a net cash inflow of $101,000 from financing activities. The company paid $130,000 in interest, $189,500 in income taxes, and $206,000 in cash dividends. Which of the following statements about the statement of cash flows is not correct?
The cash dividends of $206,000 paid will be reported as a cash outflow in the cash flow from investing activities section.
If the direct method is used, the $130,000 of interest paid and the $189,500 of income taxes paid will be reported in the cash flows from operating activities.
Supplemental disclosures required for a company using the indirect method include the amount of interest and the amount of income taxes paid.
The statement of cash flows will show a net increase in cash and cash equivalents of $834,000.