I. Statement of Cash Flows (15 points) Blue Lake Corporation Income Statement for the Year ended December 31, 2021 Net Sales Cost of goods sold Gross profit Selling & administrative expenses Depreciation expense Loss on sale of assets Interest expense Operating profit Income tax expense Net income $100,000 40,000 $ 60,000 22,000 5,000 3,000 2,000 $ 28,000 4.000 $ 24,000 Changes in Current assets and current liabilities for 2021: Cash and cash equivalents increase by $10,000 Net Accounts receivable increase by $8,000 Merchandise inventory increased by $4,000 Accounts payable increased by $6,000 Prepaid expenses decreased by $2,000 Deferred revenue decreased by $5,000 Interest payable increased by $1,000 A. Required: Prepare the Operating section of the Statement of Cash Flows using the indirection method. Complete the template on the following page. (15 pts) 2 Blue Lake Corporation 2021 Statement of Cash Flows Write "O" if not applicable. Make sure to include the correct signs (+/-) in column A. Cash flows from operating activities: Column A Net income Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense Gain on sale of property and equipment Loss on sale of property and equipment Change in operating assets and liabilities: Accounts receivable Inventory Accounts payable Prepaid expenses Deferred revenue Interest payable Net cash provided by operating activities S 3