The income statement of Kneale Transport Inc. for the year ended December 31, 2014, reported the following condensed information:

Kneale's statement of financial position contained the following comparative data at December 31:

Additional information:
Operating expenses include $70,000 in depreciation expense. The company follows IFRS. Assume that interest is treated as an operating activity for purposes of the cash flow statement.
Instructions
(a) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, using the indirect method.
(b) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, using the direct method.
(c) From the perspective of a user of Kneale Transport€™s financial statements, discuss the usefulness of the statement of cash flows prepared using the indirect method versus the direct method.

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KNEALE TRANSPORT INC. Income Statement Year Ended December 31, 2014 Sales revenue Operating expenses Income from operations Other revenues and expenses $545,000 370,000 175,000 Gain on sale of equipment $25,000 10,000 Interest expense Income before income taxes Income tax expense Net income 15,000 190,000 42,000 $148,000 Accounts receivable Prepaid insurance Accounts payable Interest payable Income tax payable Unearned revenue 2014 $50,000 8,000 30,000 2,000 8,000 10,000 2013 $60,000 5,000 41,000 750 4,500 14,000