( Appendix 11A) 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 $7,200 $ 17,500 Accounts receivable 8,000 10,500 Inventory 25,000 21,000 Accounts payable 10,000 15,600 Income taxes payable 2,500 1,700 Burch Company Income Statement For the year ended December 31 Sales $ 250,000 Cost of goods sold ( 160,000 ) Depreciation expense ( 14,400) ( 35,000) Other expenses Income tax expense ( 12,000 ) Net income $ 28,600 Required: Compute the net cash flows from operating activities using the direct method