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Problem 21-8 (Static) Cash flows from operating activities (direct method and indirect method) deferred income tax liability and amortization of bond discount [LO21-3, 21-4]

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Portions of the financial statements for Parnell Company are provided below.

PARNELL COMPANY Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Revenues and gains:
Sales	$	800
Gain on sale of building		11		$	811
Expenses and loss:
Cost of goods sold	$	300
Salaries		120
Insurance		40
Depreciation		123
Interest expense		50
Loss on sale of equipment		12			645
Income before tax					166
Income tax expense					78
Net income				$	88

PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in thousands)
		Year
	2021			2020		Change
Cash	$	134		$	100	$34
Accounts receivable		324			216	108
Inventory		321			425	(104	)
Prepaid insurance		66			88	(22	)
Accounts payable		210			117	93
Salaries payable		102			93	9
Deferred tax liability		60			52	8
Bond discount		190			200	(10	)

Problem 21-8 (Static) Part 1

Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method and the indirect method.