Accounting 102 Discussion Questions

Instructions 1. What are the major advantages of the indirect method of reporting cash flows from operating activities? 2. A corporation issued $200,000 of common stock in exchange for $200,000 of fixed assets. Where would this transaction be reported on the Statement of Cash Flows? 3. A corporation issued $5,000,000 of 20 year bonds for cash at 105. How would the transaction be reported on the Statement of Cash Flows? 4. Is depreciation a source of cash flow? 5. When astatement of cash flows is prepared using the direct method, what are some of the operating cash flows?