) Lone Star Hat Company uses the direct method for its statement of cash flow. Assume Accrued Liabilities relate to Operating Expenses. It reports the following information regarding the year ending December 31, 2018:

Lone Star Hat Company Income Statement For the Year Ended December 31, 2018

Sales Revenue $312,000

Cost of Goods Sold 247,000

Operating expenses 32,500

Net Income $32,500

Lone Star Hat Company Partial Balance Sheet December 31, 2018 and 2017

2018 2017

Accounts Receivable (net) $19,500 $15,600

Merchandise Inventory 23,400 28,600

Accrued Liabilities 1,560 3,900

Accounts Payable (Merchandise Inventory) 15,600 9,100

Assume that there were no sales of long-term assets, no interest revenue, and no expenses other than the expenses shown above. Also, assume that Accounts Payable is for purchases of merchandise inventory only. Prepare the operating activities section of the statement of cash flows??