Refer to the information in PB12-2.

Required:

Prepare the cash flows from the operating activities section of the 2017 statement of cash flows using the direct method.

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Income Statement Selected Balance Sheet Accounts Sales Revenue $78,000 2017 2016 Expenses: $ 430 $ 490 Merchandise Inventory Accounts Receivable Cost of Goods Sold 36,000 1,800 1,500 Depreciation Expense 16,000 Accounts Payable Salaries Payable Utilities Payable 1,200 1,300 Salaries Expense 10,000 450 300 Rent Expense 2,500 100 Insurance Expense Interest Expense Utilities Expense 1,300 Prepaid Rent 50 100 1,200 Prepaid Insurance 70 90 1,000 Net Income $10,000