Refer to the data given in Exercise 15-34.

Required:

Prepare a schedule of operating cash flows by using the direct method.

Exercise 15-34

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Arequipa Merchandising Corporation Income Statement For the Year Ended December 31, 2009 $ 750,000 Sales Less: Cost of goods sold Beginning inventory $ 200,000 Purchases 400,000 Ending inventory (100,000) (500,000) (50,000) (10,000) (40,000) (20,000) $ 130,000 (52,000) $ 78,000 Less: Depreciation expense Less: Amortization of patent Less: Wages expense Less: Insurance expense Income before taxes Less: Income taxes (all current) Net income