1. When using the direct method, which items usually constitute the largest components of cash inflows from operating activities?
2. Describe how to compute each of the cash inflows and cash outflows from operating activities under the direct method.
3. Why is depreciation expense not generally reported on the statement of cash flows when using the direct method?
4. Why do companies often use a spreadsheet to prepare the statement of cash flows?
5. Why should companies attempt to secure cash for investment in property, plant, and equipment from long-term or permanent sources?