$1$

Problem $11-3$A $($Algo$)$ Calculate operating activities$-$indirect method $($LO$11-3)$

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

$\backslash$table$[[$Net sales,,$],[$Expenses:$,,$$$295,$ e$9$e$],[$Cost of goods sold,$$175,00$e$,],[$Operating expenses,$50,080,],[$Depreciation expense,,$],[,15,000,],[$Incone tax expense,$17,000,],[$Total expenses,,$257,000],[$Net incone,,$ $38,0$ee$]]$

References

$\backslash$table$[[$AVATAR TECHNOLOGIES$],[$Selected Balance Sheet Data$],[$Decenber $31,2024,$ compared to Decenber $31,2023],[$Decrease in accounts receivable,$ $5,000],[$Increase in inventory,$12,00$e$],[$Decrease in prepaid rent,$8,0$ ee$],[$Increase in salaries payable,$4,0$e$9],[$Decrease in accounts payable,$7,000],[$Increase in incone tax payable,$16,0$ ee$]]$

Required:

Prepare the operating activities section of the statement of cash flows for Avatar Technologies using the indirect method. $($Amounts to be deducted should be indicated with a minus sign.$)$

$\backslash$table$[[$AVATAR TECHNOLOGIES$],[$Statement of Cash Flows$],[$For the Year Ended December $31,2024],[$Cash Flows from Operating Activiles:,,$],[$Net income,$],[$Adjustments to reconcile net income to net cash flows from operating activities,$],[$Depreciation expense,$\backslash$table$[[137,000],[37\mathrm{.}0001]],],[,]]$