Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 20

Find a recent annual report for a firm with business acquisitions (e.g., Compaq, GE).Locate the firm's consolidated statement of cash flows and answer the following:
• Does the firm employ the direct or indirect method of accounting for operating cash flows
• How does the firm account for the balances in balance sheet operating accounts (e.g., accounts receivable, inventory, accounts payable) in determining operating cash flows
• Describe the accounting for cash paid for business acquisitions in the statement of cash flows.
• Describe the accounting for any noncontrolling subsidiary interest, acquired in-process research and development costs, and any other business combination-related items in the consolidated statement of cash flows.