Pesci Ltd. is a private company reporting under ASPE. Its income statement and changes in current assets and current liabilities for the year are reported below:

Instructions

Prepare the operating activities section of the cash flow statement using the indirect method.

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PESCI LTD. Income Statement Year Ended November 30, 2021 Sales $948,000 Cost of goods sold 490,000 Gross profit 458,000 $310,000 Operating expenses Depreciation expense Gain on sale of equipment 50,000 (10,000) 350,000 Profit before income tax 108,000 Income tax expense 30,000 Profit $ 78,000 Changes in current assets and current liabilities were as follows: Accounts receivable $ 36,000 decrease Inventory Prepaid expenses Accounts payable Dividends payable Income taxes payable 19,000 increase 2,000 increase 12,000 decrease 5,000 decrease 4,000 decrease