Gail Company's 1990 and 1989 balance sheets showed the following items:

An examination of the company's activities during 1990, including the income statement, reveals the following:

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Prepare a statement of cash flows that follows the direct method to calculate the net cash provided (or used) by operating activities. Do not prepare a working paper but do show any supporting calculations.

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Cash Accounts receivable. Merchandise inventory. December 31 1990 1989 Debits $ 15,000 24,000 $ 12,000 27,000 63,000 54,000 53,000 45,000 $155,000 $138,000 Equipment .. Totals.. Credits Accumulated depreciation, equipment. Common stock, $10 par value Retained earnings. Totals $ 14,000 $ 9,000 75,000 66,000 $155,000 75,000 54,000 $138,000