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Portions of the financial statements for Hawkeye Compay are provided below: Hawkeye Company Income Statement For the year ended Dec 31, 2013 ($ in 000s)

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.

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