Logan Company Income Statement Sales.... $4,120 Cost of goods sold 2,890 Gross margin...... 1,230 Selling and administrative expenses 835 Net operating income 395 Nonoperating items: Loss on sale of equipment (3) Income before taxes... Income taxes... Net income 392 217 $ 175 Required: Assume that you have been asked to teach a workshop to the employees within Logan Company's Marketing Department. The purpose of your workshop is to explain how the statement of cash flows differs from the income statement. Your audience is expecting you to explain the logic underlying each number included in the statement of cash flows. Prepare a memo that explains the format of the state- ment of cash flows and the rationale for each number included in Logan's statement of cash flows.