Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s).

Cash Flows from Operating Activities (Indirect method)

Net income ........................................................................................$164

Adjustments for noncash effects:

Depreciation expense ................................................................................52

Changes in current assets and current liabilities:

Increase in accounts receivable ....................................................................(28)

Decrease in inventory ................................................................................40

Increase in prepaid rent ..............................................................................(4)

Decrease in accounts payable .....................................................................(16)

Decrease in income tax payable .....................................................................(8)

Net cash flows from operating activities .........................................................$200

Cash Flows from Operating Activities (Direct method)

Cash received from customers .................................................................$ 4,020

Cash paid to suppliers ...........................................................................(2,580)

Cash paid for operating expenses ..............................................................(1,152)

Cash paid for income taxes ........................................................................(88)

Net cash flows from operating activities .........................................................$200

Required:

Complete the following income statement for Reverse Logic. Assume all accounts payable are to suppliers.

REVERSE LOGIC Income Statement For the year ended December 31, 2012 Revenues Expenses: Cost of goods sold Operating expenses Depreciation expense Income tax expense Total expenses $ 2 52 Net income $164