The following comparative balance sheet and other information relate to Carlson Company.

(10 points)

Carlson Company
Comparative Balance Sheets December 31, 20x5 and 20x4
Assets	20x5	20x4
Cash	$ 140	$ 140
Accounts receivable (net)	210	280
Inventory	350	420
Prepaid expenses	105	70
Equipment (net)	3,010	2,800
Investments and other assets	4,900	4,200
Total assets	$8,715	$7,910
Liabilities and Stockholders' Equity
Accounts payable	$ 350	$ 280
Income taxes payable	70	140
Long-term note payable	2,100	1,400
Common stock	1,400	1,400
Retained earnings	4,795	4,690
Total liabilities and stockholders' equity	$8,715	$7,910

Additional information:

Depreciation expense $560

Cash dividends declared and paid 50

a. Compute net income, assuming net income and the cash dividends were the only items affecting retained earnings. Show your work.

b. Compute net cash flows from operating activities using the indirect method.