The $2025$ income statement and comparative balance sheet of Rolling Hills, Inc. follow:

View the income statement.

View the comparative balance sheet.

View the additional information.

Read the requirements.

Requirement $1.$ Prepare the $2025$ statement of cash flows by the direct method. $($Use a minus sign or parentheses for amounts that result in a decrease in cash. If an input field is not used in the statement, leave the field empty; do not select a label or enter a zero.$)$

Complete the statement one section at a time, beginning with the cash flows from operating activities.

Rolling Hills, Inc.

Statement of Cash Flows

Year Ended December $31,2025$

Cash Flows from Operating Activities:

Receipts:

Requirements

Prepare the $2025$ statement of cash flows by the direct method.

How will what you learned in this problem help you evaluate an investment?

Income Statement

$\backslash$table$[[\backslash$table$[[$Rolling Hills, Inc.$],[$Income Statement$],[$Year Ended December $31,2025]]],[$Net Sales Revenue,,$$,437,000],[$Cost of Goods Sold,,,$210,200],[$Gross Profit,,,$226,800],[$Operating Expenses:$],[$Salaries Expense,$$,79,400,],[$Depreciation Expense$-$Plant Assets,,$14,700,],[$Other Operating Expense$,,10,800,],[$Total Operating Expenses,,,$104,900],[$Operating Income,,,$121,900],[$Other Income and $($Expenses$)$:$],[$Interest Revenue,,$8,500,]]$

Comparative Balance Sheet

$\backslash$table$[[\backslash$table$[[$Rolling Hills, Inc.$],[$Comparative Balance Sheet$],[$December $31,2025$ and $2024]]],[,,2025,2024],[$Assets$],[$Current Assets:$],[$Cash$,$$$,26,800$$$,14,900],[$Accounts Receivable,,$27,200,25,200],[$Merchandise Inventory,,$79,000,91,200],[$Long$-$term Assets:$],[$Land$,,34,800,10,000],[$Plant Assets,,$121,620,110,220],[$Accumulated Depreciation$-$Plant Assets,,$(18,720),(14,520)$