Exercise 21-25 Cash flows from operating activities (direct method)-includes sale of cash equivalent [LO21-3] Portions of the financial statements for Clear Transmissions Company are provided below CLEAR TRANSMISSIONS COMPANY Income Statement For the Year Ended December 31, 2016 (S in 000s) Sales Cost of goods sold $1,320 500 820 Gross margin Salaries expense Depreciation expense Patent amortization expense Interest expense Loss on sale of cash equivalents S220 180 40 456 Income before taxes Income tax expense 364 182 Net Income $ 182 CLEAR TRANSMISSIONS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2016 and 2015 ($ in 000s) Year 2016 2015 Change $102 $100 2 Cash Accounts receivable Inventory Accounts payable Salaries payable Interest payable Income taxes payable 220 232 (12) 440 450 (10) 134 86 20 10 140 80 25 15 6