Refer to Best Buy’s financial statements in Appendix A to answer the following.

1. Is Best Buy’s statement of cash flows prepared under the direct method or the indirect method? How do you know?

2. For each fiscal year 2007, 2006, and 2005, is the amount of cash provided by operating activities more or less than the cash paid for dividends?

3. What is the largest amount in reconciling the difference between net income and cash flow from operating activities in 2007? In 2006? In 2005?

4. Identify the largest cash flows for investing and for financing activities in 2007 and in 2006.