The following accounts and corresponding balances were drawn from Geneses Company’s Year 2 and Year 1 year-end balance sheets:

The Year 2 income statement is shown next: Income Statement

Sales ........................................................................$420,000
Rent expense ..........................................................(52,000)
Utilities expense ......................................................(45,300)
Other operating expenses .......................................(195,000)
Net income ..............................................................$127,700

Required
a. Prepare the operating activities section of the statement of cash flows using the direct method.
b. Prepare the operating activities section of the statement of cash flows using the indirect method.

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Year 2 Account Title Year 1 Accounts receivable Prepaid rent Utilities payable Other operating expenses payable $65,000 $72,000 1,950 3,800 3,200 27,000 31,500