Cash Flows from Operating Activities (Indirect and Direct Methods) In Addition, the Following Information Related to Net Changes in Is

Cash flows from operating activities (indirect and direct methods).Presented below is the income statement of Cowan, Inc.: $$\begin{array} { l r } \text { Sales revenue } & \$ 380,000 \\\text { Cost of goods sold } & 225,000 \\\text { Gross profit } & \$ 155,000 \\\text { Operating expenses } & 85,000 \\\text { Income before income taxes } & 70,000 \\\text { Income taxes } & 28,000 \\\text { Net income } & \$ 42,000\end{array}$$ In addition, the following information related to net changes in working capital is presented: The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.
InstructionsPrepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows:
(a) using the indirect method.
(b) using the direct method.

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