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in this presentation we will continue with the statement of cash flows in direct method looking at the change in prepaid expenses for more accounting information and accounting courses visit our website at accounting instruction dot info were going to be using this information weve got the comparative balance sheet weve got the income statement and some additional information we will be working primarily with the difference in the comparative balance sheet with the use of a worksheet taking this information to create this worksheet so this is just basically a comparative balance sheet that has been condensed down to something that looks like a post-closing trial balance we are constructing our cash flows from operations from it we have all of our differences were basically just finding a home for these differences we know if we do so that if we find a home for all of these differences then itll add up to that difference the difference in cash which is basically the bottom line of