Q3: Statement of cashflows

Presented below are the 2020 income statement and comparative balance sheet information for Siegfried & Royce (S&G).

Siegfried & Royce Income Statement
For the Year Ended December 31, 2020
($ in thousands)
Sales revenue		$12,500
Operating expenses:
Cost of goods sold $7,300
Depreciation 400
Rent 250
Administrative and other 2,200
Total operating expenses		10,150
Income before income taxes		2,350
Income tax expense		940
Net income		$ 1,410
Balance Sheet information ($ in thousands)	Dec. 31, 2020	Dec. 31, 2019
Assets:
Cash	$3,280	$1,300
Accounts receivable	1,250	980
Inventory	980	900
Prepaid rent	150	100
Plant & equipment	3,000	2,600
Less: Accumulated depreciation	(1,200)	(800)
Total assets	$7,460	$5,080
Liabilities and shareholders equity:
Accounts payable	$ 500	$ 580
Payables for administrative and other expenses	650	700
Income taxes payable	450	350
Note payable (due 12/31/2017)	2,500	2,000
Common stock	1,500	1,000
Retained earnings	1,860	450
Total liabilities and shareholders equity	$7,460	$5,080

Required:

1. Prepare S&Gs 2020 statement of cash flows, using the indirect method to present cash flows from operating activities.

2. Prepare the cash flows from operating activities section of S&Gs 2020 statement of cash flows using the direct method. Assume that all purchases and sales of inventory are on account, and that there are no anticipated bad debts for accounts receivable.