CP12-5 Computing Cash Flows from Operating Activities (Direct Method) Refer to the information in CP12-2. LO12-3, 12-4 12-5, 12-6 Required: Prepare the cash flows from operating activities section of the 2017 statement of cash flows using the direct method. TIP: Convert the cost of goods sold to cash paid to suppliers by adding the increase in inventory and subtracting the increase in accounts payable. $2,060 900 Income Statement Sales Revenue Expenses: Cost of Goods Sold Depreciation Expense Salaries Expense Rent Expense Insurance Expense Interest Expense Utilities Expense Net Income 2016 $ 60 450 Selected Balance Sheet Accounts 2017 Merchandise Inventory $ 82 Accounts Receivable 380 Accounts Payable Salaries Payable Utilities Payable Prepaid Rent Prepaid Insurance 200