(SCF—Direct and Indirect Methods) Comparative balance sheet accounts of Jensen Company are presented below.

Additional data:
1. Equipment that cost $10,000 and was 40% depreciated was sold in 2007.
2. Cash dividends were declared and paid during the year.
3. Common stock was issued in exchange for land.
4. Investments that cost $35,000 were sold during the year.
5. There were no write-offs of uncollectible accounts during the year.
Jensen’s 2007 income statement is as follows.

Instructions

(a) Compute net cash provided by operating activities under the direct method.

(b) Prepare a statement of cash flows using the indirect method.

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JENSEN COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances Cash Accounts Receivable Merchandise Inventory Investments (Available-for-sale) Equipment Buildings Land Totals 2007 $ 80,000 2006 $ 51,000 145,000 130,000 75,000 61,000 55,000 85,000 70,000 48,000 145,000 145,000 40,000 25,000 $610,000 $545,000 Credit Balances Allowance for Doubtful Accounts $ 10,000 $ 8,000 Accumulated Depreciation-Equipment 21,000 14,000 Accumulated Depreciation-Building 37,000 28,000 Accounts Payable 70,000 60,000 Income Taxes Payable 12,000 10,000 Long-Term Notes Payable 62,000 70,000 Common Stock 310,000 260,000 Retained Earnings 88,000 95,000 Totals $610,000 $545,000