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Prepare the operating activities section of the statement


Sellmer's Pasta, Inc., has the following financial statements:

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At the end of 2011, Sellmer purchased additional equipment for $24,625. Sellmer paid dividends of $5,000 during the year.

Required:

a. Prepare a statement of cash flows for 2011 using the direct method. Assume that advertising is paid in cash.

b. Prepare the operating activities section of the statement of cash flows for 2011 using the indirect method. Note that there is no difference between the two methods for the investing and financing sections. 

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Managerial Accounting: Prepare the operating activities section of the statement
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