The income statement of Heart Grain 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:
Increase
Decrease*
Accounts receivable (net) .........$12,000*
Inventories ...............4,200
Prepaid expenses ..............2,500*
Accounts payable (merchandise creditors) ....8,400*
Accrued expenses (operating expenses) .....2,300
Income tax payable .............3,600*
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: $645,000 367.800 $277,200 Depreciation expense Other operating expenses 45,000 155,400 Total operating expenses Income before income tax Income tax expense Net income 200,400 76,800 25,400 51,400