Exercise 12-18B Direct: Cash flows from operating activities LO P5 Using the following income statement and additional year-end information. SONAD COMPANY Income Statement For Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Salaries expense $300,578 Depreciation expense 52,656 Rent expense 59,238 Amortization expenses-Patents 6,582 Utilities expense 24,134 $2,194,000 1,075,060 1,118,940 Gain on sale of equipment Net income 443,188 675,752 8,776 $ 684,528 Accounts receivable Inventory $43,150 increase 32,775 increase Accounts payable Salaries payable $10,375 decrease 2,150 decrease Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Prepare the operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.) Answer is complete but not entirely correct. Statement of Cash Flows (Partial) Cash flows from operating activities Decrease in Salaries payable X $ 52,656 X Amortization expensesPatents x 6,582 X Gain on sale of equipment X (8,776) Increase in Accounts receivable (43,150) Increase in Inventory (32,775) Decrease in Accounts payable X (10,375) Decrease in Salaries payable (2,150) Net cash provided by operating activities $ (37,988)