The following selected information is provided for Lynez Company. All sales are credit sales and all receivables are trade receivables.

Accounts receivable, January 1 net balance . . . . . . . . . . . . . . . . . . . $125,000

Accounts receivable, December 31 net balance . . . . . . . . . . . . . . . . 165,000

Sales for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000

Uncollectible accounts written off during the year . . . . . . . . . . . . . . 14,000

Bad debt expense for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000

Cash expenses for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 681,000

Net income for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,000

Using the format illustrated in the chapter and the preceding information, answer the following questions:

1. Using the direct method, what is the net cash flow from operations that Lynez

Company would report in its statement of cash flows?

2. Assuming the use of the indirect method, what adjustments to net income would be required in reporting net cash flow from operations?