Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method. (40 points)

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RASHID CORPORATION Income Statement For Year Ended December 31, 2013
Sales		$504,000
Cost of goods sold	$327,600
Depreciation expense	42,000
Other operating expenses	125,500	(495,100)
Other gains (losses):
Gain on sale of equipment		7,200
Income before taxes		$ 16,100
Income tax expense		(4,800)
Net income		$ 11,300

RASHID CORPORATION Balance Sheets At December 31
	2013	2012
Assets
Cash	$ 64,650	$ 55,800
Accounts receivable	21,000	29,000
Inventory	58,000	52,100
Equipment	240,000	222,000
Accumulated depreciation	(106,000)	( 96,000)
Total assets	$277,650	$262,900
Liabilities:
Accounts payable	$ 28,400	$ 23,700
Income taxes payable	1,050	1,200
Total liabilities	$ 29,450	$ 24,900
Equity
Common stock	$106,000	$106,000
Contributed Capital in excess of par value	18,000	18,000
Retained earnings	124,200	114,000
Total equity	$248,200	$238,000
Total liabilities and equity	$277,650	$262,900

Answer:

RASHID CORPORATION Cash Flows from Operating Activities (Indirect Method) For Year Ended December 31, 2013