The income statement of Country Kitchen Bakeries Inc. for the current year ended June 30 is as follows:

Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:

Prepare the cash flows from operating activities section of the statement of cash flows, using the directmethod.

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Sales Cost of merchandise sold Gross profit Operating expenses: $456,000 259,000 $197,000 Depreciation expense Other operating expenses $35,000 92,400 Total operating expenses Income before income tax Income tax expense Net income 127,400 69,600 19,300 S 50,300 Increase Decrease Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Accrued expenses (operating expenses) Income tax payable $10,500* 3,500 3,400* 7,200* 1,100 2,400*