1. Does a statement of cash flows disclose payments of cash to purchase cash equivalents? Does it disclose receipts of cash from selling cash equivalents?

2. Identify the categories of cash flows reported separately on the statement of cash flows.

3. Identify the category for each of the following cash flow activities: (a) purchase of equipment for cash; (b) payment of wages; (c) issuance of common shares for cash; (d) receipt of cash dividends from share investment; (e) collection of cash from customers; (f) issuance of bonds for cash.

4. Is the direct or indirect method of reporting operating cash flows more informative? Explain. Which method is more common practice?