DO Cash Flows from Operating Activities-Direct Method The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows: Sales Cost of merchandise sold Gross profit $520,530 295,560 $224,970 $39,940 105,600 Operating expenses: Depreciation expense Other operating expenses Total operating expenses Income before income tax Income tax expense Net income 145,540 $79,430 22,040 $57,390 Changes in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase/ Decrease* Accounts receivable (net) Inventories $11,540" 4,020 Prepaid expenses Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Income tax payable 3,850" 8,210- 1,150 2,750" a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Booker T Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from operating activities: Cash received from customer Cash payments for merchandise 295.560 x Cash payments for operating expenses 295.560 cash payments for income taxes 295.560 x Net cash flow from operating activities $ 100,600