Use the following income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method.

Exercise 12-6 Cash flows from operating activities (indirect)

P2 ABBECK COMPANY Income Statement For Year Ended December 31, 2008 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,828,000 Cost of goods sold . . . . . . . . . . . . . . . . . . . 991,000 Gross profit . . . . . . . . . . . . . . . . . . . . . . . . 837,000 Operating expenses Salaries expense . . . . . . . . . . . . . . . . . . . . $245,535 Depreciation expense . . . . . . . . . . . . . . . . 44,200 Rent expense . . . . . . . . . . . . . . . . . . . . . . 49,600 Amortization expenses—Patents . . . . . . . 4,200 Utilities expense . . . . . . . . . . . . . . . . . . . 18,125 361,660 475,340 Gain on sale of equipment . . . . . . . . . . . . . . 6,200 Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 481,540 Changes in current asset and current liability accounts for the year that relate to operations follow.

Accounts receivable . . . . . . . . . $30,500 increase Accounts payable . . . . . . . $12,500 decrease Merchandise inventory . . . . . . . 25,000 increase Salaries payable . . . . . . . . . 3,500 decrease AppendixLO1