Using the following income statement and cash flow adjustment information, prepare the operating cash flow section of the statement of cash flows using the direct method.
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,150
Adjustments:
(a) Interest payable decreased by $60.
(b) Accounts receivable decreased by $290.
(c) Inventory increased by $500.
(d) Accounts payable decreased by $130.