The income statement for Kosinski Manufacturing Company contains the following condensed information. LO11 KOSINSKI MANUFACTURING COMPANY Income Statement For the Year Ended December 31, 2017 Sales revenue $6,583,000 Cost of goods sold $2,810,000 Operating expenses, excluding depreciation 2,086,000 Depreciation expense 880,000 Loss on disposal of equipment 24,000 5,800,000 Income before income taxes 783,000 Income tax expense 353,000 Net income $ 430,000 The $24,000 loss resulting from the sale of machinery resulted from selling equipment for $270,000 cash. Machinery was purchased at a cost of $750,000. The following balances are reported on Kosinski’s comparative balance sheets at December 31.
2017 2016 Cash $672,000 $130,000 Accounts receivable 775,000 610,000 Inventory 834,000 867,000 Accounts payable 521,000 501,000 Income tax expense of $353,000 represents the amount paid in 2017. Dividends declared and paid in 2017 totaled $200,000.
INSTRUCTIONS

(a) Prepare the statement of cash fl ows using the indirect method.

(b) Prepare the statement of cash fl ows using the direct method.