Assignment 2 Use the following income statement and information about selected current assets and current liabilities to calculate the net cash from or used in operating activities using the indirect method. The company's profit is tax-exempt and its management decides to classify interest paid as operating activities. PETERS COMPANY Income Statement For Year Ended December 3 1. 2011 Sales.................. Cost of goods sold.......... $180,000 (104,000) $ 76,000 Gross profit. Operating expenses: Salaries and wages expense.... Depreciation expense............ $(25,000) (5,000) (7,200) (1,900) Rent expense.................. (39,100) $36,900 Interest expense.............. Operating profit.............. Gain on sale of land......... Net profit............. 2,000 $38,900 Selected beginning and ending balances of current asset and current liability accounts, all of which relate to operating activities, are as follows: Balance Dec 31,2011 Dec 3, 2010 $27,600 $24,000 18,200 20,000 Accounts receivable.............. ...... Merchandise inventory............................... 550 400 Prepaid rent.............. Accounts payable.......... 27,100 31,000 9,000 Salaries and wages payable.......... 10,400