Presented below is the income statement of Hongha Ltd for the year ended 31 Dec 2020: 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:

ALL in $	31 Dec 2019	31 Dec 2020	Changes
Accounts receivable	20,000	35,000	Increased by 15,000
Inventories	31,000	11,600	Decreased by 19,400
Salaries payable (operating expenses)	12,000	4,000	Decreased by 8,000
Accounts payable	8,500	20,500	Increased by 12,000
Income tax payable	31,000	28,000	Decreased by 3,000

The company also indicates that depreciation expense for the year was $16,700. Required: a) Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows using the indirect method. (show all your workings) (8 marks) b) Explain the difference between net income and net cash flows from operating activities. (2 marks) c) Assume you are the manager of business. Is the statement of cash flows necessary for you? Why? (10 marks) d) Which method (direct method or indirect method) do you prefer to prepare cash flows statement? Why? (10 marks)