Statement of Cash Flows 43. Cash flows from operating activities (indirect and direct methods). Presented below is the income statement of Cowan, 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 12.000 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 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