Response to the following questions:
1. Two companies each incur interest expense of $16,000 and pay dividends of $30,000. In addition, the companies receive interest and dividends from investments of $8,000 and $12,000, respectively. How would the statements of cash flows differ if one company uses IFRS and the other uses U.S. GAAP?
2. Briefly describe how to determine each of the operating cash inflows and operating cash outflows under the direct method.