Exercise 12-20B (Static) Direct: Cash flows from operating activities LO P5 Using the following income statement and additional year-end information. SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $245,535 Depreciation expense 44,200 Rent expense 49,600 Amortization expenses -Patents 4,200 Utilities expense18,125 $1,828,000 991,000 837,000 Gain on sale of equipment Net income 361,660 475,340 6,200 $ 481,540 Accounts receivable Inventory $30,500 increase 25,000 increase Accounts payable Salaries payable $12,500 decrease 3,500 decrease

Exercise 12-20B (Static) Direct: Cash flows from operating activities LO PS Using the following income statement and additional year-end information SONAD COMPANY Income Statement For Year Ended December 31 Sales $1,828,000 Cost of goods sold 991,080 Gross profit 837,080 Operating expenses Salaries expense $245,535 Depreciation expense 44,200 Rent expense 49,600 Amortization expenses-Patents 4,200 Utilities expense 18,125 361,660 475, 340 Gain on sale of equipment 6,200 Net income $ 481,540 Accounts receivable Inventory $38,500 increase 25,000 increase Accounts payable Salaries payable $12,500 decrease 3,500 decrease Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be Indicated with a minus sign.) Accounts receivable Inventory $30,500 increase 25,000 increase Accounts payable Salaries payable $12,500 decrease 3,500 decrease Prepare the operating activities section of the statement of cash flows using the direct method (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (Partial) Cash flows from operating activities $ 0 $1,828,000 991,000 837,000 SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $245,535 Depreciation expense 44,200 Rent expense 49,600 Amortization expenses-Patents 4,200 Utilities expense 18,125 Gain on sale of equipment Net income 361,660 475, 340 6,200 $ 481,540 Accounts receivable Inventory $30,500 increase 25,000 increase Accounts payable Salaries payable $12,500 decrease 3,500 decrease