Use the abbreviated comparative financial statements for Pacific Digital Corporation in the Working Papers. The comparative balance sheet for Pacific Digital Corporation lists an intangible asset, Patents. The patents were granted in the first year of the business's existence. Intangible assets like Patents are written off as an expense over a period of years. Although the expense is recognized on the income statement under the accrual basis of accounting, it does not involve an outflow of cash. The cash was actually spent in an earlier period. Since the amortized patent expense shown on Pacific Digital’s comparative income statement does not use cash, it is handled the same way as depreciation expense. Both patents and depreciation expense are adjustments to net income (or net loss) and presented before changes in current assets and liabilities.

Instructions:

Prepare a statement of cash flows for the current year for Pacific Digital Corporation.