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		$1,490,000
Cost of goods sold
Beginning inventory	$430,000
Purchases	755,000
Ending inventory	(205,000)
		(980,000)
Depreciation expense		(53,000)
Amortization of patent		(20,500)
Wages expense		(74,000)
Insurance expense		(38,500)
Income before taxes		$324,000
Income taxes (all current)		(106,000)
Net income		$218,000

Other information is as follows:

1. Accounts payable decreased by $23,000 during the year.
2. Accounts receivable increased by $16,000.
3. All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $10,000.
4. Prepaid insurance increased by $20,000 during the year.