Marchant Ltd. reported the following abbreviated statement of financial position and statement of income for 2024.

Required

a. Prepare a statement of cash flows for Marchant Ltd. for the year ended December 31, 2024, using the indirect method. 

b. Determine the cash flows from operating activities using the direct method. 

c. Was the cash flow generated by the company’s operating activities during the year larger or smaller than the net income? Should these two amounts be the same? Explain.  

d. Was the change in the amount of working capital during the year the same amount as cash from operating activities? Should these two amounts be the same? Explain.

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MARCHANT LTD. Comparative Statement of Financial Position Cash Accounts receivable Inventory Property, plant, and equipment Less: Accumulated depreciation Total assets Accounts payable Wages payable Loan payable Common shares Retained earnings Total liabilities and shareholders' equity Dec. 31, 2024 $ 60,000 120,000 320,000 700,000 (260,000) $940,000 $ 82,000 8,000 350,000 200,000 300,000 $940,000 Dec. 31, 2023 $ 70,000 140,000 280,000 650,000 (230,000) $910,000 $ 85,000 10,000 400,000 150,000 265,000 $910,000