The SCF for MacLaren Supplies Limited, using the direct method of presentation for operating activities, is shown below.

Required:
1. Some of the items included in operating activities, above, may be presented in other sections of the SCF. Explain the alternatives open to the company. What alternative is open for dividends paid, now in financing activities?
2. Redraft the SCF, classifying all items identified in requirement 1 into sections other than operating activities.
3. Return to the SCF as presented in the question. Redraft the SCF, classifying interest and dividends paid in operating activities.
4. Explain why companies might choose the presentations provided in requirement 2 or3.

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MACLAREN SUPPLIES LIMITED Statement of Cash Flows Year ended 31 December 20x5 Operating Activities Cash received from customers Cash paid for operating expenses Cash paid for interest Cash paid for income tax Cash received from investment income $406,600 (306,300) 7.700) 20,200) 4,900 Cash from operating $77,300 Investing activities: Sold long-term investment Purchased fixed assets 36,000 (28.400) Cash from investing 7,600 Financing activities: Dividends paid Bonds payable retired (20,000) (60,000) Cash used for financing Net increase in cash during the year Cash balance, beginning of the year Cash balance, end of the year (80,000) 4,900 16,000 $20,900