Exercise 12-4 Indirect: Cash flows from operating activities LO P2 The following income statement and additional year-end information is provided. SONAD COMPANY Income Statement For Year Ended December 31 Sales $1,828,000 Cost of goods sold 991,000 Gross profit Operating expenses Salaries expense 837,000 $ 245, 535 Depreciation expense Rent expense Amortization expenses-Patents Utilities expense 44, 200 49, 600 4, 200 18, 125 361,660 Gain on sale of equipment Net income 475, 340 6, 200 $ 481,540 Accounts receivable Inventory $30, 500 increase 25,000 increase Accounts payable Salaries payable $12,500 3,500 Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities