[The following information applies to the questions displayed below.] Portions of the financial statements for Hawkeye Company are provided below.

HAWKEYE COMPANY
Income Statement
For the Year Ended December 31, 2021
($ in millions)
Sales				$	890
Cost of goods sold					345
Gross margin					545
Operating expenses:
Salaries	$	231
Depreciation		189
Loss on sale of land		14
Total operating expenses					434
Operating income					111
Other income (expense):
Gain on sale of cash equivalents					4
Interest expense					(39	)
Income before tax					76
Income tax expense					38
Net income				$	38

HAWKEYE COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	234		$	211		$	23
Accounts receivable		394			419			(25	)
Inventory		882			861			21
Accounts payable		221			256			(35	)
Salaries payable		181			190			(9	)
Interest payable		57			51			6
Income tax payable		91			106			(15	)

1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method.

2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect method.