The financial statements of Procter & Gamble (P&G) can be accessed at the book’s website.

Instructions
Refer to P&G’s financial statements and the accompanying notes to answer the following questions.
(a) Which method of computing net cash provided by operating activities does P&G use? What were the amounts of cash provided by operations for the years 2004, 2005, and 2006? Which two items were most responsible for the increase in cash provided by operating activities in 2006?
(b) What was the most significant item in the cash flows used for the investing activities section in 2006? What was the most significant item in the cash flows used for the financing activities section in 2006?
(c) Where is depreciation reported in P&G’s statement of cash flows? Why is depreciation added to net income in the statement of cash flows?