Baxter Corporation began the year with accounts receivable, inventory, and prepaid expenses totaling $64,000. At the end of the year, Baxter had a total of $76,000 for these current assets. At the beginning of the year, it owed current liabilities of $45,000, and at year-end, current liabilities totaled $38,000.
Net income for the year was $85,000. Included in net income was a $4,000 gain on the sale of land and depreciation expense of $9,000.
Show how Baxter should report cash flows from operating activities for the year. Baxter uses the indirect method.