Use the following information to determine this company’s cash flows from operating activities using the indirect method.

KATAHN COMPANY Selected Balance Sheet Information December 31, 2008 and 2007 2008 2007 Current assets Cash . . . . . . . . . . . . . . . . . . . $84,650 $26,800 Accounts receivable . . . . . . . . 25,000 32,000 Inventory . . . . . . . . . . . . . . . . 60,000 54,100 Current liabilities Accounts payable . . . . . . . . . . 30,400 25,700 Income taxes payable . . . . . . . 2,050 2,200 KATAHN COMPANY Income Statement For Year Ended December 31, 2008 Sales . . . . . . . . . . . . . . . . . . . . . . $515,000 Cost of goods sold . . . . . . . . . . . 331,600 Gross profit . . . . . . . . . . . . . . . . 183,400 Operating expenses Depreciation expense . . . . . . . $ 36,000 Other expenses . . . . . . . . . . . . 121,500 157,500 Income before taxes . . . . . . . . . . 25,900 Income taxes expense . . . . . . . . . 7,700 Net income . . . . . . . . . . . . . . . . $ 18,200.AppendixLO1