Suppose your company sells services of $190 in exchange for $140 cash and $50 on account. Depreciation of $70 relating to equipment also is recorded.

1. Calculate the amount that should be reported as net cash flow from operating activities.

2. Calculate the amount that should be reported as net income.

3. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).