The income statement and selected balance sheet information for Direct Products Company for the year ended December 31, 2010, is presented below.

Required:

Prepare the cash flows from operating activities section of the 2010 statement of cash flows using the indirect method.

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Income Statement Selected Balance Sheet Accounts Sales Revenue $48,600 2010 2009 Expenses: Accounts Receivable $560 $580 Cost of Goods Sold 21,000 Merchandise Inventory 990 770 Depreciation Expense 2,000 Accounts Payable 440 460 Salaries Expense 9,000 Prepaid Rent 25 20 Rent Expense 4,500 Prepaid Insurance 25 28 Insurance Expense 1,900 Salaries Payable 100 Interest Expense 1,800 Utilities Payable 20 Utilities Expense 1755 70 1,400 Net Income $ 7,000