The following account balances for the noncash current assets and current liabilities of Labrador Company are available:

In addition, the income statement for 2017 is as follows:
2017
Sales revenue .................................$100,000
Cost of goods sold ..............................75,000
Gross profit .................................$ 25,000
General and administrative
expense ........................................$ 8,000
Depreciation expense ............................3,000
Total operating expenses ..................$ 11,000
Income before interest and
taxes ........................................$ 14,000
Interest expense ...................................3,000
Income before tax ...........................$ 11,000
Income tax expense ..............................5,000
Net income ....................................$ 6,000
Required
1. Prepare the Operating Activities section of the statement of cash flows using the direct method.
2. What does the use of the direct method reveal about a company that the indirect method does not?

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December 31 2017 2016 Accounts receivable nventory Office supplies Accounts payable Salaries and wages payable Interest payable Income taxes payable $ 4,000 6,000 25,000 10,000 4,500 2,500 32,000 7,000 7,500 500 4,500 3,000