Statement of Cash Flows—Direct Method Glendive Corp. is in the process of preparing its statement of cash flows for the year ended June 30, 2008. An income statement for the year and comparative balance sheets are as follows:

Dividends of $7,000 were declared and paid during the year. New plant assets were purchased during the year for $195,000 in cash. Also, land was purchased for cash. Plant assets were sold during the year for $25,000 in cash. The original cost of the assets sold was $45,000, and their book value was $30,000. Additional stock was issued for cash, and a portion of the bank loan was repaid.
Required 1. Prepare a statement of cash flows for 2008 using the direct method in the Operating Activities section.
2. Evaluate the following statement: Whether a company uses the direct or indirect method to report cash flows from operations is irrelevant because the amount of cash flow from operating activities is the same regardless of which method is used.

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Sales revenue Cost of goods sold Gross profit General and administrative expenses Depreciation expense Loss on sale of plant assets Total expenses and losses Income before interest and taxes Interest expense Income before taxes Income tax expense Net income For the Year Ended June 30, 2008 $550,000 350,000 $200,000 $ 55,000 75,000 5,000 $135,000 $ 65,000 15,000 $ 50,000 17,000 $ 33,000