Q4. Presented below is the income statement of Gotham, Inc.:

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 $25,000 Inventories $19,400 Salaries payable (operating expenses) $8,000 Accounts payable $17,000 Income taxes 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. Instructions [Marks: 12] 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 (b) using the direct method.