Indirect method The income statement and balance sheet provide the following information for 2022.

INCOME STATEMENT FOR YEAR ENDED 30 JUNE 2022

$ $

Service revenue 60 000 Expenses:

Salaries 40 000 Depreciation 15 000 Loss on sale of equipment 2 000 Other expenses 7 500 64 500 Net loss (4 500)

Partial balance sheet as at 30 June 2022 2021 Accounts receivable 10 000 26 000 Salaries payable 5 000 2 000 Other accrued expenses 1 000 5 000 1 Calculate cash flows for operations using the indirect method.
2 Why are the reasons for the difference between cash flow from operations and net income important to financial analysts?