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ue Ihursday Attempts Keop the Highest: /6 B. Statement of cash flows Two methods can be used to canstruct a statement of cash flows: the direct method and the indirect method Under the indirect method of constructing a statement of cash flows, data from two accounts in the income statement-or, alternatively, the statement of retained earmings-are used. These two accounts are the firm's and the dividends distributed during the accounting pe Also, in applying this technique, two balance sheet accounts are never used. These two accounts are the cash (and cash equivalents) account and the account. A firm engages in a variety of activities that generate or require cash payment. The following boxes list examples of these activities. Identify whether each transaction produces an operating, an investing, or a financing cash flow resterday, International Imports Inc. prepaid its rent for the next three months. Three month's rent is worth $279,249 This transaction is classified as Yorkshire Pudding Inc. sold 1 million additional shares of common stock for $18 per share. This transaction is classified as A firm engages in a variety of activities tha these activities. Classity inflow) or a use of cash (cash outflow). t generate or require the payment of cash. The following table lists two of each transaction according to whether it is serving as a source of cash to the firm (cash nsaction Source Use Over the month, Radiant Energy Technologies collected $57,825 in sales tax. The obligation is due to the state in three days Today, an electronic payment was made to the state to pay the obligation This month, Greener Industries collected $87,458 in accounts receivable