Refer to the information provided in P11–3A for Alliance Technologies.

Required:

Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the direct method.

P11–3A

Portions of the financial statements for Alliance Technologies are provided below.

             ALLIANCE TECHNOLOGIES
          Selected Balance Sheet Data
December 31, 2021, compared to December 31, 2020

Decrease in accounts receivable ................... $ 7,000
Increase in inventory ........................................... 14,000
Decrease in prepaid rent ................................... 10,000
Increase in salaries payable ................................ 6,000
Decrease in accounts payable .......................... 9,000
Increase in income tax payable ..................... 24,000

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ALLIANCE TECHNOLOGIES Income Statement For the year ended December 31, 2021 Net sales $405,000 Expenses: $235,000 70,000 17,000 Cost of goods sold Operating expenses Depreciation expense Income tax expense 27,000 Total expenses 349,000 $ 56,000 Net income