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

Parnell Company

Income Statement

For the year ended Dec 31, 2013

($ in 000s)

Sales		$ 800
Cost of Good Sold		(300)
Gross Margin		500
Salaries Expense	$120
Insurance Expense	40
Depreciation Expense	123
Interest Expense	50	(333)
Gains and losses:
Gain on sale of building		11
Loss on sale of machinery		(12)
Income before tax		166
Income tax expense		(78)
Net Income		88

Parnell Company

Selected Accounts from Comparative Balance Sheets

Dec 31, 2013 and 2012

($ in 000s)

	2013	2012	Change
Cash	134	100	34
Accounts Receivable	324	216	108
Inventory	321	425	(104)
Prepaid Insurance	66	88	(22)
Accounts Payable	210	117	93
Salaries payable	102	93	9
Deferred income tax liability	60	52	8
Bond Discount	190	200	(10)

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows 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.