Presented below is the income statement of Cowan, Inc for the year ended December 31, 2021. Sales 380,000 Cost of goods sold 225,000 Gross profit 155,000 Operating expenses 85,000 Income before income taxes 70,000 Income taxes 28,000 Net income 42,000 In addition, the following information related to net changes in working capital is presented: Debit Credit Cash 12,000 Accounts receivable 15,000 Inventories 19,400 Salaries payable (operating expenses) 8,000 Accounts payable 12,000 Income tax payable 3,000 The company also indicates that depreciation expense for the year was 16,700 and that the deferred tax liability account increased 2,600.

Required: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: a. Using the indirect method and interpret the result! b. Using the direct method and interpret the result!

Presented below is the income statement of Cowan, Inc for the year ended December 31, 2021. In addition, the following information related to net changes in working capital is presented: The company also indicates that depreciation expense for the year was 16,700 and that the deferred tax liability account increased 2,600. Required: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows: a. Using the indirect method and interpret the result! b. Using the direct method and interpret the result