Based on the information set out in PA-44 below, prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

Data from PA-44

Zippo Ltd.Income StatementFor the Year Ended December 31, 2016Sales .................................................................................................... ?$2,511,100Cost of goods sold ............................................................................. ? 1,256,000Gross profit ......................................................................................... ? 1,255,100Depreciation of property, plant, and equipment ........................... ?334,400Interest expense ................................................................................. ? ? ? ?75,000Other expenses ................................................................................... ? ? ?256,600Income before income taxes ............................................................. ? ? 589,100Income taxes ........................................................................................ ? ? ?300,000Net income ........................................................................................... ? $ 289,100

Additional information:

• Property, plant, and equipment costing $570,000 was sold for $422,000.
• 100,000 ordinary shares were issued to acquire $450,000 of property, plant, and equipment.
• $212,000 of deferred development costs were capitalized during the year.
• The company nets many items to ??Other Expenses,?? for example, gains and losses on fixed asset sales and some amortization.
• The deferred product development expenditures were all paid in cash.
• The decrease in the bonds payable account was due to the amortization of the premium.
• Zippo has elected to designate its at fair value through profit or loss investments as cash equivalents.
• Zippo has adopted a policy of classifying cash outflows from interest and dividends as financing activities.

Zippo Ltd. Comparative Balance Sheet As at December 31, 2015 and 2016 2016 2015 $ 160,000 $ 100,000 Cash At fair value through profit or loss investments 12,000 10,000 Accounts receivable 300,000 375,000 Less allowance for bad debts and doubtful accounts (10,000) (15,000) Inventory 575,000 498,000 Property, plant, and equipment 1,984,000 1,396,000 Less accumulated depreciation (650,400) (487,000) Intangibles, net 126,000 135,000 Deferred product development costs 564,000 417,000 3,060,600 2,429,000 Accounts payable 81,000 84,000 Income taxes payable 12,000 2,000 Bonds payable 659,500 674,000 Ordinary shares 1,150,000 700,000 Retained earnings 1,158,100 969,000 $3,060,600 $2,429,000