2.

The income statement of Packer Inc. for the year ended December 31, 2018, reported the following condensed information:

Sales $785,000

Cost of goods sold 200,000

Gross profit 585,000

Operating expenses 340,000

Income from operations 245,000

Income tax expense 61,250

Net income $183,750

Packer's statement of financial position contained the following comparative data at December 31:

2018 2017

Accounts receivable $52,500 $45,000

Inventory 25,000 45,000

Prepaid expenses 12,000 13,500

Accounts payable 34,000 41,000

Accrued liabilities 4,500 5,800

Income taxes payable 5,500 3,000

The corporation has no depreciable assets. Accounts payable pertain to inventory purchases.

Instructions

Using the direct method, prepare the operating activities of the statement of cash flows for the year ended December 31, 2018.