The 2014 and 2015 balance sheets and related income statement of Watson and Holmes Detective Agency follow:

REQUIRED:
Prepare a statement of cash flows under both the direct and indirect methods for2015.

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2015 2014 BALANCE SHEET ASSETS Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Long-lived assets Less: Accumulated depreciation $10,000 7,000 (1,000) 8,000 12,000 (4,000) $32,000 $ 6,000 2,000 (500) 10,000 11,000 (2,000) $26,500 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Deferred revenues Long-term note payable Less: Discount on note payable Common stock Retained eanings 5,000 1,000 10,000 (800) 12,000 4,800 $32,000 6,000 2,000 10,000 (1,000) 6,000 3,500 $26,500 Total liabilities and shareholders' equity INCOME STATEMENT Revenues Cost of goods sold Depreciation expense Interest expense Bad debt expense Other expense Net income $42,000 (24,000) (2,000) (3,000) (2,000) 9,000) 2,000