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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	$	740
Gain on sale of buildings		12		$	752
Expenses and loss:
Cost of goods sold	$	270
Salaries		114
Insurance		34
Depreciation		117
Interest expense		44
Loss on sale of machinery		11			590
Income before tax					162
Income tax expense					81
Net income				$	81

PARNELL COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2018 and 2017 ($ in 000s)
	Year
		2018			2017		Change
Cash	$	128		$	106		$	22
Accounts receivable		318			222			96
Inventory		327			419			(92	)
Prepaid insurance		67			82			(15	)
Accounts payable		204			123			81
Salaries payable		114			99			15
Deferred income tax liability		72			58			14
Bond discount		178			206			(28	)

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.

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