Refer to the information for New Vision Company in E12-9.

Required:
1. Present the operating activities section of the statement of cash flows for New Vision Company using the direct method. Assume that Other Accrued Liabilities relate to Other Expenses on the income statement.
2. Of the potential causes of differences between cash flow from operations and net income, which are the most important to financialanalysts?

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$66,000 Service Revenue Expenses Salaries $42,000 7,300 6,000 1,700 Depreciation Utilities Other Net Income Decrease in Accounts Receivable Bought a small service machine Increase in Salaries Payable Decrease in Other Accrued Liabilities 57,000 $9,000 $12,000 5,000 9,000 4,250