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$($Appendix $11$A$)$ Preparing Net Cash Flows from Operating Activities$$Direct Method

The income statement for Granville Manufacturing Company is presented below.

Granville Manufacturing Company

Income Statement

For the year ended December $31$

Sales $$4,199,830$

Cost of goods sold $(2,787,210)$

Gross margin $$1,412,620$

Operating expenses:

Salaries expense $$(831,800)$

Depreciation expense $(246,100)$

Administrative expense $(131,000)$

Bad debt expense $(51,700)$

Other expenses $(43,900)$

Net income $ $108,120$

The following balance sheet changes occurred during the year:

Accounts receivable increased by $$878,800.$

Inventory increased by $$100,325.$

Prepaid expenses decreased by $$64,100.$

Accounts payable increased by $$43,850.$

Salaries payable increased by $$54,900.$

Required:

Prepare the cash flows from operating activities section of the statement of cash flows, using the direct method. Use a minus sign to indicate any decreases in cash or cash outflows.

Granville Manufacturing Company

Statement of Cash Flows $($Partial$)$

Using Direct Method

Cash flows from operating activities:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$