Computing Cash Flow from Operating Activities $($Direct Method$)$

Arctic Company's income statement and comparative balance sheets follow

ARCTIC COMPANY Income Statement For Year Ended December $31,$ Year $8$ Sales $$582,400$ Cost of goods sold $$427,200$ Wages expense $152,000$ Insurance expense $24,800$ Depreciation expense $17,600$ Interest expense $14,400$ Gain on sale of land $(20,000)616,000$ Net income $ $(33,600)$

ARCTIC COMPANY Balance Sheets Dec. $31$ Year $8$ Dec. $31$ Year $7$ Assets Cash $$39,200$ $$22,400$ Accounts receivable $33,60040,000$ Inventory $85,60090,400$ Prepaid advertising $8,00010,400$ Plant assets $288,000177,600$ Accumulated depreciation $(62,400)(44,800)$ Total assets $$392,000$ $$296,000$ Liabilities and Stockholders' Equity Accounts payable $$13,600$ $$24,800$ Interest payable $4,800-$ Bonds payable $160,000-$ Common stock $196,000196,000$ Retained earnings $41,60075,200$ Treasury stock $(24,000)-$ Total liabilities and equity $$392,000$ $$296,000$

relate to merchandise purchases$$

a$$Compute Arctic Company$$s cash flow from operating activities using the direct method.

$$Note$$Use negative signs with your answers$$when appropriate$$

$$Note$$Select$$N$$A$$as your answer if the related answer is zero$$

ing Activity Cash Flows