1. The income statement for President Company for the current year ended December 31 and balances of selected accounts at the beginning and the end of the year are as follows: Sales.. Cost of merchandise sold. Gross profit.. Operating expenses: Depreciation expense Other operating expenses Total operating expenses. Income before income tax Income tax expense Net income. . Accounts receivable (net) Inventories.. Prepaid expenses. Accounts payable (merchandise creditors). $445,500 154,000 $291,500 $ 38,500 115,280 153,780 $137,720 39,600 End of Year $ 98,120 Beginning of Year $36,300 $31,240 .92,400 80,300 .14,520 15,840 67,540 62,700 19,140 20,900 4,400 4,400 Accrued expenses payable (operating expenses) Income tax payable. Instructions Prepare the Cash flows from operating activities section of the statement of cash flows, using the direct method.