Statement of Cash Flows
Response to the following problem:
The president of a company, which is being audited for the first time, is concerned about all the unnecessary financial information the company is being required to disclose, and says, "We have always prepared only a balance sheet and an income statement. Surely these are enough. The only information anyone is interested in is how much we earned and what we have left.
Prepare a statement of cash flows. What is this statement, what information does it provide, what are the major sections of the statement, and what is included in each section (under the indirect method)?"
Required :
Prepare a written response that answers the president's questions.