Omega Company's accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands):

Other Data:

The company issued $22,000, 6 percent bonds payable at par during the year.

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (List cash outflows as negative amounts. Enter your answers in thousands.)

2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (List cash outflows and losses as negative amounts. Enter your answers in thousands.)

$ 20,640 INCOME STATEMENT Sales revenue Expenses Cost of goods sold $ 9, 110 Depreciation expense 3,070 Salaries expense 4,270 Rent expense 2,940 Insurance expense 990 Utilities expense 850 Interest expense on bonds 660 Loss on sale of investments 680 Net loss 22,570 $ (1,930) SELECTED BALANCE SHEET ACCOUNTS Current Year Merchandise inventory $ 100 Accounts receivable 457 Accounts payable 254 Salaries payable 36 Rent payable 12 Prepaid rent 23 Prepaid insurance 34 Prior Year $ 70 541 226 16 W NWU AN 24 26 5 Answer is complete but not entirely correct. OMEGA COMPANY Cash Flows from Operating Activities Direct Method (in thousands) Cash flows from operating activities: Cash receipts from customers 20,724 Cash payments to suppliers 9,112 Cash payments for salaries 4,250 Cash payments for rent 2,949 Cash payments for insurance 1,019 Cash payments for utilities 850 Cash payments for bond interest 660 Net cash provided by operating activities 39,564 $ 1,930 3,070 OMEGA COMPANY Cash Flows from Operating Activities Indirect Method (in thousands) Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation expense Loss on sale of investments Decrease in accounts receivable Increase in merchandise inventory Increase in accounts payable Increase in salaries payable Decrease in prepaid rent Decrease in rent payable Increase in prepaid insurance 680 84 (30) 28 20 3 (12) (29) Total adjustments Net cash provided by operating activities 3,814 5,744 $