Repeat the requirements in BE22-10 using the indirect method.

In BE22-10

Operating Activities Section, Direct Method. Rodent World Exotic Pet Shops, Incorporated reported the following comparative balance sheets and income statement for the current year. Prepare the operating activities section of the statement of cash flows using the direct method. Assume accrued expenses relate to selling, general and administrative expenses.

Rodent World Exotic Pet Shops

Income Statement

For the year ended December 31

Sales……………………………………………….               $ 80,085

Cost of Goods Sold……………………………….           48,051

Gross Profit………………………………………..               $ 32,034

Selling, General, and Administrative Expenses…...             $ 10,700

Depreciation Expense………………………………       2,400

Total Operating Expenses…………………………..             $ 13,100

Income Before Interest and Taxes………………….             $ 18,934

Interest Expense…………………………………….            $ (4,000)

Interest Revenue……………………………………       3,400

Income Before Tax…………………………………             $ 18,334

Income Tax Expense……………………………….            (7,334)

Net Income…………………………………………             $ 11,000

Rodent World Exotic Pot Shops, Incorporated Balance Sheets At December 31 Assets Ending Beginning Current Assets Cash Accounts Receivable, net Merchandise Inventory Prepaid Insurance $ 7000 8,500 2,300 1,700 S 19,500 $ 3,500 8.000 4.000 2.200 S 17700 Total Current Assets Noncurrent Assets Investments Property, Plant, and Equipment-net S 12,000 75,000 $ 87000 $106,500 $ 24300 58,000 S 82,300 $100,000 Total Noncurrent Assets Total Assets Liabilities Current Liabilities Accounts Payable Accrued Expenses Income Taxes Payable S 4,500 9,800 6,000 20,300 1,000 5,120 4,850 10,970 Total Current Liabities Noncurrent Uablities Notes Payable 31,000 S 31,000 $ 51.300 $ 42,630 S 42,630 S 53.600 Total Noncurrent Liabilities Total Liabilities Shareholders' Equity S 9,000 20,000 26,200 S 55,200 Total Liabilities and Sharehciders Equity $106,500 Common Stock, $1 par value Additional Paid-in Capital Retained Eamings S 9,000 20,000 17.400 S 46,400 Total Shareholders' Equity