The 2017 and 2018 balance sheets and related income statement of Watson and Holmes Detective Agency follow: 2018 2017 BALANCE SHEET ASSETS Cash Accounts receivable Less: Allowance for doubtful accounts Inventory Property, plant, and equipment Less: Accumulated depreciation $10,000 7,000 (1,000) 8,000 12,000 (4,000) $32,000 $6,000 2,000 (500) 10,000 1,000 (2,000) $26,500 Total assets LIABILITIES AND SHAREHOLDERS' EQUITY Accounts payable Unearned revenues Note payable Less: Discount on notes payable Common stock Retained earnings $5,000 1,000 10,000 (800) 12,000 4,800 $32,000 $6,000 2,000 10,000 (1,000) 6,000 3,500 $26,500 Total liabilities and shareholders' equity 2018 INCOME STATEMENT Sales revenues Cost of goods sold Depreciation expense Interest expense Bad debt expense Miscellaneous expense Net income $42,000 (24,000) (2,000) (3,000) (2,000) (9,000) $ 2,000 REQUIRED: Prepare a statement of cash flows under both the direct and indirect methods for 2018