a) Mensah and Co Limited
Statement of Cash Flow for the year ended 31 December 2017

b) Differences between Direct and Indirect Methods of reporting cash flow from operating activities:

• Direct Method: Discloses major classes of gross cash receipts and gross cash payments. It also discloses information not available elsewhere in the financial statements.
• Indirect Method: Presents net profit or loss adjusted for the effect of non-cash transactions, deferrals, and items of income or expense associated with investing or financing activities. It is also simpler to use and is widely used. (2 points for 3 marks)