1. What is the amount of cash paid for insurance?

A. 6,600

b. 1,600

c. 9,800

d. 8,200

2. In calculating direct method Net Operating Cash, cash paid for insurance is:

a. subtracted

b. added

The Perry Co. reported the following income statement for the year: Sales (100% credit) $365,000 Cost of goods sold 142,000 Gross profit 223,000 Operating expenses: Depreciation $39,400 Insurance expense 8,200 Salaries expense 76,000 123,600 Income before taxes $99,400 Income tax expense 7,250 Net income $92,150 Also during the year, the company's current assets and current liabilities changed as follows: Increase (Decrease) Cash $49,500 Accounts receivable (6,500) Inventory 12,600 Prepaid insurance 1,600 Accounts payable (100% 32,500 purchases) Salaries payable (2,400) Income taxes payable 1,650