Cash Flows from Operating Activities-Direct Method The income statement for Rhino Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows Sales Cost of merchandise sold Gross profit Operating expenses $445,500 154,000 $291,500 Depreciation expense $38,500 Other operating expenses 115,280 Total operating expenses Income before income tax Income tax expense Net income 153,780 $137,720 39,600 $98,120 End of Year $36,300 92,400 14,520 67,540 Beginning of Year Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) $31,240 80,300 15,840 62,700