Using the data from Exercise 2 plus the additional information in Figure 21.14, compute net cash flows from operating activities using the direct method.

In Exercise 2, From the following, calculate the net cash flow from operating activities using the indirect method:

For the year ended 2012:
Net Income .......... $2,400
Depreciation Expense ...... 620

822000 Sales Cost of Goods Sold Gross Profit 592000 Expenses: 62000 220oo0 Depreciation Expense nsurance Expense Miscellaneous Expense 30000 Total Expenses 352 000 Net Income Merchandise Inventory Accounts Receivable Prepaid Insurance Accounts Payable Salaries Payable 2011 $2,700 600 675 1,000 595 2012 $3,800 860 330 810 805