1 prepare cash flows from operating activities using direct method 2 indirect method

Portions of the financial statements for Parnell Company are provided below. $ 810 12 $ 822 PARNELL COMPANY Income Statement For the Year Ended December 31, 2018 ($ in 800s) Revenues and gains: Sales Gain on sale of buildings Expenses and loss: Cost of goods sold Salaries Insurance Depreciation Interest expense Loss on sale of machinery Income before tax Income tax expense Net income $ 305 121 41 124 51 12 654 168 84 $ 84 PARNELL COMPANY Income tax expense Net income 84 $ 84 PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in 900s) Year 2018 2017 Cash $ 136 $ 99 Accounts receivable 326 215 Inventory 320 427 Prepaid insurance 65 90 Accounts payable 212 116 Salaries payable 184 92 Deferred income tax liability 62 53 Bond discount 189 282 Change $ 37 111 (107) (25) 96 12 9 (13) Required