The net income reported on the income statement for the current year was $305,000. Depreciation recorded on equipment and a building amount to $72,500 for the year. Balances of the current asset and current liabilities accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $53,000 $60,600 Accounts receivable (net) 69,000 77,600 Inventories 135,000 128,400 Prepaid expenses 4,500 7,200 Accounts payable (merchandise creditors) 67,500 65,100 Salaries payable 8,500 7,000 Required:

(1) Prepare the Cash flows for Operating Activities section of the statement of cash flows, using the indirect method.

(2) If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.