P$11-8$ Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts

are in thousands $(000)$s$).$

Cash Flows froul Operating Activities $($Indirect method$)$

Net income

Depreciation expense

Increase in accounts recelvable

$(38)$

Decrease in inventory

$50$

Increase in prepaid remt

Decrease in accounts payalsle

Decrease in income tax payalsle

$(9)$

Net cash flows from operating activities

$(9)$ $$223$

Cash Flows froul Operating Activities $($Direct method$)$

Cash received from customers

$$4,070$

Cash paid to sappliers

$(2,585)$

Cash paid for operating expenses

$(1,163)$

Cash paid for income taxes

$(99)$

Net cash flows from operating activities

Required:

Complete the following income statement for Reverse Logic. Assume all accounts payable are to suppliers.

$[$Finr: Use the following calculations and work backwards from botsom $($in red$)$ to top for each item.$]$