Response to the following questions:
1. If salaries payable was $75,000 at the beginning of the year and $65,000 at the end of the year, should $10,000 be added to or deducted from income to determine the amount of cash flows from operating activities by the indirect method? Explain.
2. A corporation issued $200,000 of common stock in exchange for $200,000 of fixed assets. Where would this transaction be reported on the statement of cash flows?