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d. The cash paid to suppliers is normally disclosed on the statement
of cash flows when the indirect method of statement preparation is
employed.
e. The dollar change in the Merchandise Inventory account appears
on the statement of cash flows only when the direct method of
statement preparation is used.
Chapter 1 Exercise 6:
6. Equipment transaction and cash flow reporting
New equipment purchased during 20x4 totaled $280,000. The 20x4
income statement disclosed equipment depreciation expense of
$41,000 and a $9,000 loss on the sale of equipment.
a. Determine the cost and accumulated depreciation of the
equipment sold during 20X4.
b.
Determine the selling price of the equipment sold.
c. Show how the sale of equipment would appear on a statement of
cash flows prepared by using the indirect method.
Chapter 1 Problem 3:
3. Cash flow information: Direct and indirect methods