$($Appendix $11$A$)$ Determining Net Cash Flow from Operating Activities$$Direct Method

Presented below are selected balance sheet information and the income statement for Burch Company.

Selected Balance Sheet Information

Jan. $1$ Dec. $31$

Cash $$14,800$ $$17,500$

Accounts receivable $8,00010,500$

Inventory $24,30021,000$

Accounts payable $10,00024,400$

Income taxes payable $2,5001,800$

Burch Company

Income Statement

For the year ended December $31$

Sales $$250,000$

Cost of goods sold $(160,000)$

Depreciation expense $(11,700)$

Other expenses $(35,000)$

Income tax expense $(12,000)$

Net income $$31,300$

Required:

Compute the net cash flows from operating activities using the direct method.

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