Calculating Operating Cash Flows (Direct Method) Calculate the cash flow for each of the following cases. a. Cash paid for advertising: Advertising expense Prepaid advertising, beginning of year Prepaid advertising, end of year Cash paid for advertising $37,200 6,600 9,000 $ 0 b. Cash paid for income taxes: Income tax expense Income tax payable, beginning of year Income tax payable, end of year Cash paid for income taxes $17,400 4,260 2,940 $ 0 C. Cash paid for merchandise purchased: Cost of goods sold $108,000 Inventory, beginning of year 18,000 Inventory, end of year 15,000 Accounts payable, beginning of year 6,000 Accounts payable, end of year 7,200 Cash paid for merchandise purchased: $ 0 Check