Cash flows from operating activities (indirect and direct methods) Presented below is the income statement of Foley, Inc.: Sales $380,000 225,000 $155,000 85,000 70,000 28.000 $ 42,000 Cost of goods sold Gross profit Operatingexpenses Income before income taxes ncome taxes Net income In addition, the following information related to net changes in working capital is presented Credit Debit $12,000 15,000 Cash Trade accounts receivable S19,400 Inventories Salaries payable (operating expenses) Trade accounts payable Income tax payable 8,000 12,000 3,000 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600 Instructions Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows (a) using the indirect method (b) using the direct method