Loveless Corporation had the following 2010 income statement.

Revenues............................$100,000

Expenses.................................60,000

..............................................$ 40,000

In 2010, Loveless had the following activity in selected accounts. Prepare Loveless's cash flows from operating activities section of the statement of cash flows using

(a) The direct method and

(b) The indirect method.

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1/1/10 Revenues 12/31/10 Accounts Receivable 20,000 100,000 29,000 1,000 Write-offs 90,000 Collections. Write-offs Allowance for Doubtful Accounts 1,000 1,200 1/1/10 1,840 Bad debt expense 2,040 12/31/10