Reading and Interpreting Best Buy’s Statement of Cash Flows Refer to Best Buy’s statement of cash flows shown in the chapter opener and answer the following questions for the most recent year.

Required 1. Which method, direct or indirect, does Best Buy use in preparing the Operating Activities section of its statement of cash flows? Explain how you know which method is being used.

2. By what amount does net cash provided by operating activities from continuing operations differ from net earnings? What are the two largest adjustments to reconcile the two numbers?

Explain the nature of these adjustments. Why is one added and the other deducted?

3. What is the largest source of cash in the Investing Activities section of the statement? What is the largest use in this section? Explain how these two items are related.

4. What is the largest use of cash in the Financing Activities section of the statement? Explain the nature of this outflow. Why might the company engage in this type of activity?