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Exercise 12-4 Indirect: Cash flows from operating activities LO P2 The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales $2,233,000 Cost of goods sold 1,094,170 Gross profit 1,138,830 Operating expenses Salaries expense $305,921 Depreciation expense 53,592 Rent expense 60,291 Amortization expenses-Patents 6,699 Utilities expense 24,563 451,066 687,764 Gain on sale of equipment 8,932 Net income $ 696,696 Accounts receivable Inventory $16,250 increase 12,875 increase Accounts payable Salaries payable $8,400 decrease 5,350 decrease Prepare the operating activities section of the statement of cash flows using the Indirect method (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Help Net Income 098, Accounts receivable Inventory $16, 250 increase 12,875 increase Accounts payable Salaries payable $8,400 decrease 5,350 decrease Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities