The comparative balance sheets and income statement of Piura Manufacturing follow.

Piura Manufacturing

Comparative Balance Sheets

For the Years Ended June 30, 20X1 and 20X2

1		20X1	20X2
2	Assets:
3	Cash	$72,000.00	$146,400.00
4	Accounts receivable	44,000.00	48,000.00
5	Inventory	64,000.00	44,000.00
6	Plant and equipment	104,000.00	112,000.00
7	Accumulated depreciation	(52,000.00)	(48,000.00)
8	Land	20,000.00	20,000.00
9	Total assets	$252,000.00	$322,400.00
10	Liabilities and equity:
11	Accounts payable	$32,000.00	$48,000.00
12	Wages payable	4,000.00	2,400.00
13	Bonds payable	24,000.00	16,000.00
14	Preferred stock (no par)	4,000.00	12,000.00
15	Common stock	30,000.00	36,000.00
16	Paid-in capital in excess of par	50,000.00	76,000.00
17	Retained earnings	108,000.00	132,000.00
18	Total liabilities and equity	$252,000.00	$322,400.00

Piura Manufacturing

Income Statement

For the Year Ended June 30, 20X2

1	Sales	$320,000.00
2	Cost of goods sold	(200,000.00)
3	Gross margin	$120,000.00
4	Operating expenses	(88,000.00)
5	Net income	$32,000.00

Additional transactions for 20X2 were as follows:

A.	Cash dividends of $8,000 were paid.
B.	Equipment was acquired by issuing common stock with a par value of $6,000. The fair market value of the equipment is $32,000.
C.	Equipment with a book value of $12,000 was sold for $6,000. The original cost of the equipment was $24,000. The loss is included in operating expenses.
D.	Two thousand shares of preferred stock were sold for $4 per share.

	Required:
1.	Prepare a schedule of operating cash flows using (a) the indirect method and (b) the direct method.
2.	Prepare a statement of cash flows using the indirect method.
3.	Prepare a statement of cash flows using a worksheet
4.	As far as the direct and indirect methods, which would investors prefer?