Palm Tree Limited has the following financial statements: Palm Tree Limited Income Statement For the Year Ended December 31, 2022 Net sales $165,000 Cost of goods sold 97,500 Gross profit 67,500 Operating expenses 27,500 Income from operations 40,000 Interest expense 3,500 Income before income taxes 36,500 Income Tax 11,000 Net Income $ 25,500 Palm Tree Limited Income Statement For the Year Ended December 31, 2022 2022 2021 Cash $15,000 $9,750 Accounts receivable 11,750 8,750 Inventories 16,500 11.750 Prepaid insurance 2,500 2,000 Equipment 25,500 33,500 Accumulated depreciation-equipment (16,250) (17,750) Total assets $55,000 $48,000 Accounts payable $5,000 $6,750 Wages payable 2,000 2,000 Income taxes payable 3,000 1,000 Long-term note payable 0 8,750 Common shares 15,000 15,000 Retained earnings 30,000 14,500 Total liabilities and shareholders' equity $55,000 $48,000 Additional information Equipment that cost $8,000 was sold for the carrying amount of $3,750 Dividends declared and paid were $10,000. Required Prepare the operating activities section for the statement of cash flows using the direct method