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Unformatted text preview: k. Depreciation of equipment l. Purchase of long-term investment m. Issue of ordinary shares n. Increase in accounts payable o. Profit p. Payment of cash dividend P18-4 Preparing the cash flow statement direct method The 20X2 comparative balance sheet and income statement of Town East Press Ltd follows. Town East had no non-cash financing and investing transactions during 20X2. During the year, there were no sales of land or equipment, no issues of bills payable and no buy-back of shares. 2 Required 1. Prepare the 20X2 cash flow statement by the direct method. 2. How will what you learned in this problem help you evaluate an investment?...
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