QUESTION 6 A flood damaged a building and contents. The receipts from insurance companies totaled $600,000, which was $180,000 less than the book values. The tax rate is 20% On the statement of cash flows (indirect method), the flood loss should A be shown as an addition to net income of $126.000 B. not be shown C. be shown as an inflow from investing activities of $126,000 D. be shown as an addition to net income of $180,000 QUESTION 7 Ad objective of the statement of cash flows is to A disclose changes during the period in all asset and all equity accounts B. disclose the change in working capital during the period. C provide information about the operating, investing, and financing activities of an entity during a period. D none of these answers are correct QUESTIONS The first step in the preparation of the statement of cash flows requires the use of information included in which comparative financial statements ? O A Statements of retained earnings B Statements of cash flows C. Income statements OD Balance sheets