Other information Equipment with an original cost of $60,000 and accumulated depreciation of $40,000 was sold for $45,000 cash. Assume there is no bad debt expense. Required a. Prepare the operating activities section of the statement of cash flows using the direct method. b. Prepare the operating activities section of the statement of cash flows using the indirect method. The following information is provided for Vale Inc. Balance Sheets, December 31 Assets Cash and cash equivalents Accounts receivable, net.. Inventory.. Equipment Accumulated depreciation Land.... Total assets. Liabilities and Stockholders' Equity Accounts payable.. Other current liabilities Bonds payable Prior Year Current Year Difference $ 45,000 75,000 $105,000 65,000 $ 60,000 (10,000) 100,000 78,000 (22,000) 200,000 180,000 (20,000) (40,000) (20,000) 20,000 30,000 35,000 5,000 $410,000 $443,000 $ 33,000 $ 70,000 10,000 $ 87,000 8,000 100,000 $ 17,000 (2,000) 0 Premium on bonds payable Common stock, no-par... Retained earnings. Total liabilities and stockholders' equity 100,000 10,000 8,000 (2,000) 120,000 90,000 (30,000) 100,000 150,000 50,000 $410,000 $443,000 $ 33,000 Income Statement, For Year Ended December 31 Current Year Sales revenue... Cost of goods sold Depreciation expense. Other operating expenses Interest expense... Gain on sale of equipment. Net income... $255,000 (125,000) (20,000) (40,000) (10,000) 25,000 $ 85,000