Operating Cash Flows, Direct Method The income statement for Piura Merchandising Corporation is as follows: Piura Merchandising Corporation Income Statement At December 31, 20x2 Revenues Cost of goods sold Beginning inventory Purchases Ending inventory $365,000 800,000 (320,000) $1,520,000 Depreciation expense Amortization of patent Wages expense Insurance expense Income before taxes Income taxes (all current) Net income Other information is as follows: A. Accounts payable decreased by $17,000 during the year. B. Accounts receivable increased by $25,000. (845,000) (54,000) (20,000) (74,000) (38,500) $488,500 (106,000) $382,500 C. All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $15,000. D. Prepaid insurance increased by $24,000 during the year.