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Question: Booth Manufacturing has provided the following financial statements.
Other information includes:
(a) Equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000); and
(b) Dividends of $225,000 were declared and paid.
Statement of Cash Flows, Indirect Method Refer to the information for Booth Manufacturing above.
Required: 1. Calculate the cash flows from operations using the indirect method.
2. Prepare a statement of cash flows.
3. Conceptual Connection: Search the Internet to find a statement of cash flows. Which method was used-the indirect method or the direct method? How does the net income reported compare with the operating cash flows? To the change in cash flows?
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