The current sections of Blues Traveler Co. balance sheets at December 31. 2005 and section—indirect method. 2006, are presented below.

Blues Travelers net income for 2006 was $163,000. Depreciation expense was $30,000.
Instructions Prepare the operating activities section of Blues Traveler's statement of cash flows for the year ended December 31. 2006. using the indirect method.

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BLUES TRAVELER Co. Comparative Balance Sheets (partial) December 31 2006 2005 Current assets Cash $105,000 $ 99,000 Accounts receivable 110,000 85,000 Inventory Prepaid expenses 171.000 186.000 27,000 32.000 Total current assets $413.000 $402.000 Current liabilities Accrued expenses payable $ 15,000 $ 5,000 Accounts payable Total current liabilities $ 88,000 $ 92,000 $103.000 $ 97,000