Huang Corp. uses the direct method to prepare its statement of cash flows and follows IFRS. Huang's trial balances at December 31, 2020 and 2019, were as follows: 

Additional information: 

1. Huang purchased $5,000 of equipment during 2020.

2. Bad debt expense for 2020 was $5,000 and write offs of uncollectible accounts totalled $4,800. 

3. Huang has adopted the policy of classifying the payments of interest as operating activities on the statement of cash flows. 

Instructions 

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, using the direct method.

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Dec. 31, 2020 Dec. 31, 2019 Debits Cash $ 55,000 $ 31,000 Accounts receivable 33,000 30,000 Inventory 31,000 47,000 Property, plant, and equipment 95,000 90,000 Cost of goods sold 253,000 380,000 Selling expenses 138,000 172,000 Administrative expenses 140,000 151,300 Interest expense 15,600 28,600 Income tax expense 20,200 56,200 $780,800 $986,100 Credits Allowance for doubtful accounts $ 1,300 $ 1,100 Accumulated depreciation 26,500 25,000 Accounts payable Income taxes payable 25,000 15,500 21,000 29,100 Deferred income tax liability 8% callable bonds payable 5,300 4,600 46,000 45,500 Common shares 53,600 22,000 Retained earnings 44,700 64,600 Sales revenue 557,400 778,700 $780,800 $986,100