Refer to the information in PA12-2.

Required:

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

Data From PA12-2

The income statement and selected balance sheet information for Direct Products Company for the year ended December 31 are presented below.

Transcribed Image Text:

Income Statement Selected Balance Sheet Accounts Sales Revenue $48,600 Ending Beginning Expenses: Balances Balances Cost of Goods Sold 21,000 Accounts Recelvable $560 $580 Depreclation Expense Salaries and Wages Expense Rent Expense Insurance Expense Interest Expense Utilities Expense 2,000 Inventory 990 770 9,000 Accounts Payable Prepaid Rent Prepaid Insurance Salarles and Wages Payable Utilities Payable 420 460 4,500 25 20 1,900 25 28 1,800 100 60 1,400 20 15 Net Income $ 7,000