The accountants of Pan American Silver Corp. completed the statement of financial position at June 30, 2009, and the income statement for the quarter ended on that date and have provided the following information (in thousands):Required:

1. Prepare the operating activities section of the statement of cash flows by using the indirect method.

2. Companies that use the direct method to report cash flows from operations are also required to disclose in the notes a reconciliation of profit to cash flows from operating activities. What additional information does this disclosure requirement provide to users of financial statements? Explain.

Transcribed Image Text:

Amounts to be updated Income Statement Sales revenue $111,392 Gain on sale of assets 2,479 113,871 Expenses Cost of sales $66,046 Depreciation and amortization 21,856 Reclamation 754 Exploration 2,161 General and administration 2,498 Bad debts: 4,375 Interest and financing 2,190 Income tax 2,694 102,574 Profil $ 11,297 Selected Statement of Financial Position Accounts June 30, March 31, 2009 2009 Short-term investments $75,120 $78,081 Trade receivables 51,382 63,663 Inventories 83,623 83,445 Prepayments 3,464 3,462 Trace payables 17,834 21,564 Accrued liabilities 40,018 26,297 Income taxes payable 884 4,711