(Learning Objectives 2, 3, 4, 5: Preparing the statement of cash fl ows—indirect method) The 20X6 and 20X5 comparative balance sheets and 20X6 income statement of King Supply Corp. follow:

King Supply had no non-cash investing and fi nancing transactions during 20X6. During the year, there were no sales of land or equipment, no payment of notes payable, no retirements of shares, and no treasury share transactions.

❙ Requirements 1. Prepare the 20X6 statement of cash fl ows, formatting operating activities by using the indirect method.
2. How will what you learned in this problem help you evaluate an investment?