Wayzata Company saw its cash plummet by $110,000 in 20X0. The company's president wants an explanation of what caused the decrease in cash despite income of $60,000. He has asked you to prepare both direct and indirect method statements of cash flows from operations for 20X0. You have discovered the following information: Sales, all on credit, were $560,000. Accounts receivable increased by $130,000. Cost of goods sold was $390,000. Payments to suppliers were $455,000. Accounts payable decreased by $40,000. Inventory increased by $25,000. Operating expenses were $95,000, all paid in cash except for depreciation of $30,000. Income tax expense was $15,000; taxes payable decreased by $5,000. Prepare a statement of cash flows from operating activities using the direct method. Prepare a statement of cash flows from operating activities using the indirect method. Explain why cash decreased ny $110,000 when net income was a positive $60,000