The income statement for Piura Merchandising Corporation is as follows:

Other information is as follows:
a. Accounts payable decreased by $20,000 during the year.
b. Accounts receivable increased by $20,000.
c. All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $12,000.
d. Prepaid insurance increased by $24,000 during the year.

Required:
Prepare a schedule of operating cash flows using the direct method.

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Piura Merchandising Corporation Income Statement For the year ended December 31, 20X1 Sales Cost of goods sold Beginning inventory Purchases Less ending inventory Gross margin Operating expenses Depreciation Amortization of patent Wages expense Insurance expense Income before taxes Income taxes (all current) Net income $400,000 800,000 200,000 100,000 20,000 80,000 40,000 $1,500,000 1,000,000 $ 500,000 240,000 $ 260,000 104,000 $ 156,000