Podracer Productions provides the following income statement for the year ended December 31, 2002.

In addition, Podracer provides the following balance sheet information.

Instructions:

Using the simultaneous analysis matrix illustrated in the text, prepare the operating activities section of the statement of cash flows using (1) the direct method and (2) the indirect method.

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Sales Cost of goods sold Gross margin General expenses Depreciation expense Salaries expense. Operating income Interest revenue Interest expense Loss on sale of equipment Income before income taxes Income tax expense Net income $1,530,600 895,400 $ 635,200 255,400 23,500 114,300 $ 242,000 17,250 (12,500) (9,500) $ 237,250 85,500 $ 151,750