Lincoln Company owns no plant assets and reported the following income statement for the cur-

rent year:

Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $750,000

Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $470,000

Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,000

Rent expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,000

Insurance expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 637,000

Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $113,000

Additional balance sheet information about the company follows:

FIRST NUMBER: End of Year SECOND NUMBER::Beginning of Year

Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$54,000 $49,000

Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60,000 $66,000

Prepaid insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8,000 $7,000

Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22,000 $18,000

Wages payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9,000 $11,000

Use the information to

a. calculate the net cash ?ow from operating activities under the indirect method.

b. compute its operating cash ?ow to current liabilities (OCFCL) ratio. (Assume current liabili-

ties consist of accounts payable and wages payable.)