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Using the above information, I need help explaining the questions 1 and 2. Thank you in advance. begin{tabular}{|l|r|r|r|} hline multicolumn{3}{|c|}{ Smart Touch Computer Equipment, Inc.

image text in transcribedimage text in transcribedimage text in transcribedUsing the above information, I need help explaining the questions 1 and 2. Thank you in advance.

\begin{tabular}{|l|r|r|r|} \hline \multicolumn{3}{|c|}{ Smart Touch Computer Equipment, Inc. } \\ \hline \multicolumn{3}{|c|}{ Statement of Cashflows } \\ \hline \multicolumn{3}{|c|}{ For the year ended 12/31/2023 } & \\ \hline Cash Flows from Operations & & \\ \hline Net Income & & & \\ \hline Add: Non-cash expenditure: & & \\ \hline Depreciation Expense & & \\ \hline Cash Flow Before Working Capital Changes & & 20,000 \\ \hline Working Capital Changes: & & \\ \hline Increase in Accounts Recievable & & \\ \hline Decrease in Inventory & (17,000) & \\ \hline Increase in Accounts Payable & 2,000 & & \\ \hline Decrease in Accrued Liability & 20,000 & \\ \hline & (5,000) & \\ \hline Net Increase (decrease) of Cashflows from Operations & & \\ \hline \end{tabular} Questions \#1 Why are "wash" transactions like purchasing equipment and financing it directly with long-term note payable not shown on the Statement of Cashflows? Answer to Question \#1 Questions \#2 If the company would decide to use the DIRECT METHOD, what differences would there be on the presentation of the Statement of Cashflows

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