Problem 1. Using the indirect method, calculate the amount of net cash flows from operating activities from the following data, show your work.
Problem 2. Why is the statement of cash flows useful to a manager?
Net Income for the year 100,000 Beginning Accounts Payable $6,000
Beginning Accounts Receivable 10,000 Ending Accounts Payable 5,600
Ending Accounts Receivable 8,800 Depreciations Expense 20,400
Beginning Prepaid Expense 2,000 Amortization of Intangible Assets 1,600
Ending Prepaid Expense 2,800 Dividends, declared and paid 4,400.