M16-13 (Supplement A) Computing Cash Flows from Operating Activities (Direct Method) For each of the following independent cases, compute cash flows from operating activities using the direct method. Assume the following list includes all items relevant to operating activities. Case A Case B Sales revenue $ 70,000 $ 55,000 Cost of goods sold 35,000 32,000 Depreciation expense 10,000 2,000 Other operating expenses 5,000 13,000 Net income 20,000 8,000 Accounts receivable increase (decrease) (1,000) 4,000 Inventory increase (decrease) 2,000 0 Accounts payable increase (decrease) 0 3,000 Accrued liabilities increase (decrease) 1,000 (2,000)