Calculation of cash flows and calculation of why operating

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Calculation of cash flows and calculation of why operating cash flows different from net income.

1. What question is the direct format of the statement of cash flows designed to answer?

2. What question is the indirect format of the statement of cash flows designed to answer? Explain.

3. The following information is available for Sentry Company for the first month of the year.

Revenues	$ 17,000
Expenses	8,000
Increase in accounts receivable	800
Decrease in inventory	1,200
Decrease in supplies	400
Increase in accounts payable	1,050
Decrease in wages payable	900
Depreciation expense	1,100
Patent expense	250

Determine the cash flow from operating activities for the month.

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