Operating Cash Flows (Direct Method)

Calculate the cash flow in each of the following cases:

a.	Advertising expense	$155,000
	Prepaid advertising, January 1	27,500
	Prepaid advertising, December 31	37,500
	Cash paid for advertising:	Answer
b.	Income tax expense	$72,500
	Income tax payable, January 1	17,750
	Income tax payable, December 31	12,250
	Cash paid for income taxes:	Answer
c.	Cost of goods sold	$450,000
	Inventory, January 1	75,000
	Inventory, December 31	62,500
	Accounts payable, January 1	25,000
	Accounts payable, December 31	30,000
	Cash paid for merchandise purchased:	Answer