1. Statement of Cash flows --Part 2 Indirect Method

2. Why is there a difference between the net surplus shown in the Income Statement and the net cash inflow (outflow) from operating activities?

3. Revenue and expense items classified as investing or financing activities in the statement of cash flows. Non-cash items such as deprecation and impairment of assets Timing difference arising from deferrals or accruals of past or future operating cash flows. These generally include changes in working capital items such as accounts receivable, inventory and accounts payable.(CA and CL)

4. Reconciliation of profit/(loss) to net cash flows from operating activities—Indirect Method Profit (after tax) $3,050 Items classified as investing/financing activities Investment income (500) Loss on Sale 40 (460) Non cash items Depreciation 450 Changes in current assets and liabilities Increase in Trade and Other Receivables(net)(500) Decrease in Inventories 1,050 Decrease in Trade Payables (1,740) Decrease in income tax payable (470)(1,660) Net cash from operating activities $1,380