Portions of the financial statements for Hawkeye Compay are provided below:

Hawkeye Company

Income Statement

For the year ended Dec 31, 2013

($ in 000s)

Sales		$ 900
Cost of Good Sold		(350)
Gross Margin		550
Salaries Expense	$232
Depreciation expense	190
Interest Expense	40
Gain on sale of cash equivalents	(4)	(458)
Income before taxes and extraordinary loss		92
Income tax expense		(46)
Income before extraordinary loss		46
Extraordinary loss (flood damage to inventory)	12
Less: Tax savings	(6)	(6)
Net Income		40

Hawkeye Company

Selected Accounts from Comparative Balance Sheets

Dec 31, 2013 and 2012

($ in 000s)

	2013	2012	Change
Cash	212	200	12
Accounts Receivable	395	421	(26)
Inventory	860	850	10
Accounts Payable	210	234	(24)
Salaries payable	180	188	(8)
interest payable	55	50	5
Income Tax Payable	90	104	(14)

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows Hawkeye Company using the direct method

2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method.