These are the financial statements of Watanabe, Inc:

Required:

A. Prepare Watanabe’s statement of cash flows using the indirect method.B. Prepare Watanabe’s operating section of the statement of cash flows using the direct method.C. Which statement do you believe provides the most relevant information for external users? For internal users? Why?

Transcribed Image Text:

Watanabe, INC. Income Statement For the Year Ended December 31, 2019 $576,000 Sales Cost of goods sold Gross margin Operating expenses: Depreciation Other operating expenses Net income $ 13,000 155,800 392,000 $184,000 168,800 $ 15,200