Part II. Hartman, Inc. has prepared the following comparative balance sheets for 2014 and 2015:

2015 2014

Cash $ 292,000 $ 153,000

Accounts receivable 149,000 117,000

Inventory 150,000 180,000

Prepaid expenses 18,000 27,000

Plant assets 1,275,000 1,050,000

Accumulated depreciation (450,000) (375,000)

Patent 153,000 174,000

$1,587,000 $1,326,000

Accounts payable $ 153,000 $ 168,000

Accrued liabilities 60,000 42,000

Mortgage payable 450,000

Preferred stock 525,000

Additional paid-in capital

preferred 120,000

Common stock 600,000 600,000

Retained earnings 129,000 66,000

$1,587,000 $1,326,000

1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period.

2. The Retained Earnings account has been charged for dividends of $148,000 and credited for the net income for the year. The income statement for 2015 is as follows: Sales revenue $1,980,000 Cost of sales 1,089,000 Gross profit 891,000 Operating expenses 680,000 Net income $ 211,000

(a) From the information above, prepare a schedule of cash provided by operating activities using the direct method (present five activities with your works).

(b) From the information above, prepare a schedule of cash provided by operating activities using the indirect method (show your works).