How to calculate the cash flows using indirect method rather than direct method

3 6 P23-4 (SCF-Direct Method) Michaels Company had available at the end of 2015 the following information. 7 8 MICHAELS COMPANY COMPARATIVE STATEMENTS OFFINANCIAL PosITION AS oF DECEMBER 31, 2015 AND 2014 2015 2014 125,000175.000 350,000 350,000 (105,000) Accumulated depreciation-buildings 87,500) 400,000 Accumulated depreciation-equipment 130,000) 45,000 42,000 3,000 2,100 1,000 20,500 22,000 10,000 (112,000) 50,000 35,000 12,000 Prepaid rent Prepaid insurance 750 2,950 30,000 4,000 Short-term equity investments 9910.600 8 871,100 Total assets Share capital-ordinary Share premium-ordinary Retained earnings Long-term notes payable Bonds payable Accounts payable Income taxes payable Salaries and wages payable Short-term notes payable 240,000 220,000 7,500 88,747 70,000 425,853 32,000 4,000 3,000 0,000 25,000 60,000 420,303 22,000 5,000 0,000 Total equity and liabilities 910,600 2871.100 1238 Chapter 23 Statement of Cash Flows MICHAELS COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2015 Sales revenue Cost of goods sold Gross margin Operating expenses 1,160,000 748,000) 412,000 Selling expenses Administrative expenses Depreciation/Amortization expense Total operating expenses 79.200 56,700 40.500 276,400) 35,600 Income from operations Other income and expense Gain on sale of land Gain on sale of short-term investment Dividend revenue Interest expense 8,000 4,000 2,400 (51,750 Income before taxes Income tax expense Net income Dividends to ordinary shareholders To retained earnings (37,350) 98,250 (39,400) 58,850 24,300) 34,550 Instructions Prepare a statement of cash flows for Michaels Company using the direct method. Assume the short-term investments are non-trading. Bond premium amortized was 5,550