Exercise 12-20B (Algo) Direct: Cash flows from operating activities LO P5

The following income statement and additional year-end information is provided.

SONAD COMPANY
Income Statement
For Year Ended December 31
Sales		$ 2,402,000
Cost of goods sold		1,176,980
Gross profit		1,225,020
Operating expenses
Salaries expense	$ 329,074
Depreciation expense	57,648
Rent expense	64,854
Amortization expensesPatents	7,206
Utilities expense	26,422	485,204
		739,816
Gain on sale of equipment		9,608
Net income		$ 749,424

Accounts receivable	$ 33,300 increase	Accounts payable	$ 12,675 decrease
Inventory	39,550 increase	Salaries payable	3,900 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.)