11)

The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods. The amounts for income statement elements are missing. Incone Statement Sales Cost of goods sold $ 721 Cash Flows from Operating Activities Indirect Method Direct Method Net income Adjustments! Decrease in accounts receivable 21 Cash received from customers ? Increase in inventory (42) Decrease in accounts payable (55) Cash paid to suppliers ? Increase in salaries payable 22 Cash paid to employees Depreciation expense 28 (Not reported-no cash effect) 7 Decrease in prepaid insurance 29 Cash paid for insurance ? LOSS on sale of land 25 (Not reported-ne cash effect) Increase in income tax payable 25 Cash paid for income taxes $? et cash flows from operating activities $ 87 Net cash flows from operating activities (517) (47) (25) Salaries expense Depreciation expense Insurance expense Loss on sale of land Income tax expense Net Income Required: Deduce the missing amounts and prepare the income statement. Income Statement