Income Statement

Year Ended December 31, 2020

Sales $5,200,000

Cost of Goods Sold $3,155,000

Gross Profit $2,045,000

Operating Expenses $1,025,000

Profit from Operations Interest Expense $1,020,000

Interest Expense $120,000

Profit before Income Taxes Income Taxes. $900,000

Income Taxes $230,000

Profit $670,000

1. Operating expenses include $50,000 of depreciation expense and a $45,000 impairment loss on property, plant and equipment.
2. Accounts Receivable increased by $100,000
3. Merchandise Inventory increased by $45,000
4. Prepaid expenses related to operating expenses increased by $35,000
5. Accounts Payable to suppliers of merchandise decreased by $90,000
6. Accrued liabilities related to operating expenses decreased by $55,000
7. Interest Payable increased by $55,000
8. Income tax payable increased by $35,000

Question 1:

Prepare the operating activities section of the statement of cash flows using the Indirect Method.