Refer to the information provided in P11€“3B for Software Associates.
In P11€“3B, Portions of the financial statements for Software Associates are provided below.

Required:
Prepare the operating activities section of the statement of cash flows for Software Associates using the direct method.

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SOFTWARE ASSOCIATES Income Statement For the year ended December 31, 2015 Net sales Expenses $710,000 Cost of goods sold Operating expenses Depreciation expense Income tax expense Total expenses $420,000 130,000 33,000 49,000 632,000 $ 78,000 Net income SOFTWARE ASSOCIATES Selected Balance Sheet Data December 31, 2015, compared to December 31, 2014 Decrease in accounts receivable Decrease in inventory Increase in prepaid rent Decrease in salaries payable Increase in accounts payable Increase in income tax payable $10,000 13,000 3,000 4,000 7,000 8,000