Sith Enterprises provides the following income statement for 2008:

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $765,200

Cost of goods sold . . . . . . . . . . . . . . . . . . . . . .           375,800

Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . .           $389,400

Depreciation expense . . . . . . . . . . . . . . . . . . . .            42,000

Salaries expense . . . . . . . . . . . . . . . . . . . . . . . .            115,250

Interest expense . . . . . . . . . . . . . . . . . . . . . . . .            10,500

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . .           82,150

Income taxes expense . . . . . . . . . . . . . . . . . . . .          39,000

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .          $100,500

In addition, the following balance sheet information is available:

Using the format presented in the chapter, prepare the Operating Activities section of the statement of cash flows and present that information using

(a) The direct method and

(b) The indirect method.

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Dec. 31, 2008 Dec. 31, 2007 Accounts receivable. Inventory Prepaid other expenses Accounts payable Interest payable ncome taxes D $43,000 68,200 5,400 46.300 $39,000 65,400 7,300 47,500 1,100 4,100 900 2.850