Operating Cash Flows, Direct Method

The income statement for Piura Merchandising Corporation is as follows:

Piura Merchandising Corporation Income Statement At December 31, 20X2
Revenues		$1,550,000
Cost of goods sold
Beginning inventory	$375,000
Purchases	705,000
Ending inventory	(260,000)
		(820,000)
Depreciation expense		(53,000)
Amortization of patent		(20,500)
Wages expense		(72,000)
Insurance expense		(39,500)
Income before taxes		$545,000
Income taxes (all current)		(105,500)
Net income		$439,500

Other information is as follows:

1. Accounts payable decreased by $24,500 during the year.
2. Accounts receivable increased by $24,500.
3. All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $10,000.
4. Prepaid insurance increased by $19,000 during the year.

Required:

Prepare a schedule of operating cash flows using the direct method. (Note: Begin by entering the applicable income statement amounts. In the Adjustments column, if an account has more than one adjustment, enter the total effect of all adjustments in the applicable cell. Use a minus sign to indicate a negative adjustment or a negative cash outflow.)

Piura Merchandising Corporation
Cash Flows from Operating Activities, Direct Method
For the Year Ended December 31, 20X1
	Income Statement	Adjustments	Cash Flows
Cash flows from operating activities:
Revenues
Cost of goods sold
Depreciation expense
Amortization of patent
Wages expense
Insurance expense
Income taxes
Net income
Net cash from operating activities