The income statement for Wholly Bagel Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows:

Prepare the cash flows from operating activities section of the statement of cash flows, using the directmethod.

Sales Cost of merchandise sold Gross profit Operating expenses: $265,000 95,800 $169,200 Depreciation expense Other operating expenses 12,500 125,700 Total operating expenses Income before income tax Income tax expense Net income 138,200 31,000 12,300 18,700 Beginning of Year End of Year Accounts receivable (net) Inventories Prepaid expenses Accounts payable (merchandise creditors) Accrued expenses (operating expenses) Income tax payable $14,800 38,100 6,000 27,900 7,900 1,500 $12,500 32,800 6,400 24,300 8,400 1,500