Portions of the financial statements for parnell company are provided below. parnell company
income statement for the year ended december 31, 2018 ($ in 000s)
revenues and gains:
sales $ 710
gain on sale of buildings 12 $ 722
expenses and loss:
cost of goods sold $ 255
salaries 111
insurance 31
depreciation 114
interest expense 41
loss on sale of machinery 12 564
income before tax 158
income tax expense 79
net income $ 79
parnell company selected accounts from comparative balance sheets december 31, 2018 and 2017 ($ in 000s)
year 2018 2017 change
cash $ 125 $ 109 $ 16
accounts receivable 315 225 90
inventory 330 416 (86 )
prepaid insurance 67 79 (12 )
accounts payable 201 126 75
salaries payable 120 102 18
deferred income tax liability 78 61 17
bond discount 185 209 (24 )
required: 1. prepare the cash flows from operating activities section of the statement of cash flows for parnell company using the direct method. 2. prepare the cash flows from operating activities section of the statement of cash flows for parnell company using the indirect method.