Grania Companys income statement contained the condensed information below.

GRANIA COMPANY Income Statement For the Year Ended December 31, 2007 Revenues $970,000 Operating expenses, excluding depreciation $624,000 Depreciation expense 60,000 Loss on sale of equipment 16,000 700,000 Income before income taxes 270,000

Income tax expense 40,000 Net income $230,000

Grania's balance sheet contained the comparative data at December 31, shown on page 630. 2007 2006 Accounts receivable $75,000 $60,000 Accounts payable 41,000 28,000

Income taxes payable 11,000 7,000 Accounts payable pertain to operating expenses.

Instructions Prepare the operating activities section of the statement of cash flows using the indirect method. *P12-6A

Data for Grania Company are presented in P12-5A.

Instructions Prepare the operating activities section of the statement of cash flows using the direct method.