Portions of the financial statements for Parnell Company are provided below.

PARNELL COMPANY

Income Statement

For the Year Ended December 31, 2018 ($ in 000s)

Revenues and gains:

Sales $ 780

Gain on sale of buildings 11 $ 791

Expenses and loss:

Cost of goods sold $ 290

Salaries 118

Insurance 38

Depreciation 121

Interest expense 48

Loss on sale of machinery 12 627

Income before tax 164 Income tax expense 82

Net income $ 82

PARNELL COMPANY

Selected Accounts from Comparative Balance Sheets

December 31, 2018 and 2017 ($ in 000s)

Year 2018 2017 Change

Cash $ 132 $ 102 $ 30

Accounts receivable 322 218 104

Inventory 323 423 (100 )

Prepaid insurance 68 86 (18 )

Accounts payable 208 119 89

Salaries payable 106 95 11

Deferred income tax liability 64 54 10

Bond discount 186 202 (16 )

Required:

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

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

Required 1

Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

Cash Flows from Operating Activities:
Net cash flows from operating activities	$0

• Required 2

Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the indirect method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

Cash Flows from Operating Activities:
Adjustments for noncash effects:
Changes in operating assets and liabilities:
Net cash flows from operating activities	$0