Preparing a Statement of Cash Flows under the Direct and Indirect Formats Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that Harlan needs urgently is a statement of cash flows. Balance sheets for 2018 and 2017, the income statement for fiscal 2018, and additional information useful for preparing the SoCF are provided below:

Preparing a Statement of Cash Flows under the Direct and Indirect Formats
Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that Harlan needs urgently is a statement of cash flows. Balance sheets for 2018 and 2017, the income statement for fiscal 2018, and additional information useful for preparing the SoCF are provided below:
BALANCE SHEETS
12/31/18 12/31/17
Cash $408,000 $ 192,000
Accounts receivable 360,000 216,000
Inventory 384,000 480,000
Property, plant and equipment $608,000 $960,000
Less accumulated depreciation (320,000) 288,000 (304,000) 656,000
$1,440,000 $1,544,000
Accounts payable $ 176,000 $ 96,000
Income taxes payable 352,000 392,000
Bonds payable 360,000 600,000
Common stock 216,000 216,000
Retained earnings 336,000 240,000
$1,440,000 $1,544,000
INCOME STATEMENT
For the Year Ended December 31, 2018
Sales revenue $8,400,000
Cost of sales 7,152,000
Gross profit 1,248,000
Selling expenses $600,000
Administrative expenses 192,000 792,000
Income from operations 456,000
Interest expense 72,000
Income before taxes 384,000
Income taxes 96,000
Net income $ 288,000
The following additional data were provided:
• Dividends for the year 2018 were $192,000.
• During 2018, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
• All depreciation expense is in the selling expenses category.
REQUIRED:
1. Prepare a statement of cash flows for fiscal 2018 under the direct format (U.S GAAP), in good form.
2. Prepare a statement of cash flows for fiscal 2018 under the indirect format (U.S GAAP), in good form.
DELIVERABLE:
• An excel file, both formats should be in the same workbook.

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