Statement of Cash Flows - Direct Method

Question 1

Salaries expense

Answer 1

Salary rate plus previous year ending number minus current year ending number

Question 2

Rules with differences from beginning of the year to ending of the year.

Answer 2

Liabilities - opposite effect (Decrease Liabilities = Increase reporting amount)

Assets - Same Effect.

Question 3

Direct Method Calculation

Answer 3

Assets = Subtract beginning year balance and Add Ending year balance

Liabilities = Add beginning year balance and subtract ending year balance.