Cash Flows from Operating Activities

Income Statement

Indirect Method

Direct Method

Net income

$

?

Adjustments:

Sales

$

?

Decrease in accounts receivable

11

Cash received from customers

$

611

Cost of goods sold

?

Increase in inventory

(22

)

Decrease in accounts payable

(35

)

Cash paid to suppliers

(417

)

Salaries expense

?

Increase in salaries payable

12

Cash paid to employees

(37

)

Depreciation expense

?

Depreciation expense

18

(Not reportedno cash effect)

Insurance expense

?

Decrease in prepaid insurance

19

Cash paid for insurance

(15

)

Loss on sale of land

?

Loss on sale of land

15

(Not reportedno cash effect)

Income tax expense

?

Increase in income tax payable

15

Cash paid for income taxes

(35

)

Net income

$

?

Net cash flows from operating activities

$

107

Net cash flows from operating activities

$

107

Required:

Deduce the missing amounts and prepare the income statement.

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