1. Use the following income statement and information about selected assets and current liabilities to calculate the net cash provided or used by operating activities using the direct method.

2. Based on the following income statement and balance sheet for Rashid Corporation determine the cash flows from operating activities using the indirect method.

PETERS COMPANY Income Statement For Year Ended December 31, 2011 Sales. Cost of goods sold.. Gross profit from sales.. Operating expenses: Salaries and wages expense.. Depreciation expense. Rent expense.. Interest expense.. $25,000 5,000 7,200 1,900 Income from operations. Gain on sale of land Net income.. of which relate to operating activities, are as follows: Accounts receivable. Merchandise inventory.. Prepaid rent............. Accounts payable.. Salaries and wages payable... Interest payable $180,000 104,000 $ 76,000 39,100 $36,900 2,000 $38.900 bility accounts, all Balance Dec. 31, 2011 Dec. 31, 2010 $27,600 18,200 550 27,100 10,400 300 $24,000 20,000 400 31,000 9,000 250 Sales Cost of goods sold. Depreciation expense. Rashid Corporation Income Statement For Year Ended December 31, 2011 Other operating expenses.. Other gains (losses): Gain on sale of equipment. Income before taxes. Income tax expense. Net income.. Assets Cash. Accounts receivable Inventory. Equipment. Accumulated depreciation. Total assets.. Liabilities: Accounts payable Income taxes payable. Total liabilities.. Equity: Rashid Corporation Balance Sheets At December 31 Common stock.. Contributed Capital in excess of par value.. Retained earnings.. $327,600 42,000 125,500 (495,100) $504,000 $ 28,400 1,050 $ 29,450 $106,000 18,000 124,200 7,200 $ 16,100 2011 $ 64,650 21,000 58,000 240,000 (106,000) $277,650 (4,800) $ 11,300 2010 $ 55,800 29,000 52,100 222,000 ( 96,000) $262.900 $ 23,700 1,200 $ 24,900 $106,000 18,000 114,000