Refer to the information in PA12-2.

Required:

Prepare the cash flows from operating activities section of the 2017 statement of cash flows using the direct method.

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Income Statement Selected Balance Sheet Accounts 2017 $560 Sales Revenue Expenses: Cost of Goods Sold Depreciation Expense Salaries Expense Rent Expense Insurance Expense Interest Expense Utilities Expense $48,600 2016 Accounts Receivable Merchandise Inventory Accounts Payable Prepaid Rent Prepaid Insurance Salaries Payable Utilities Payable $580 770 460 21,000 2,000 990 440 9,000 25 25 4,500 28 1,900 100 70 1,800 1,400 20 15 Net Income $ 7,000