Portions of the financial statements for Hawkeye Company are provided below.

HAWKEYE COMPANY Income Statement For the Year Ended December 31, 2016 Sales Cost of goods sold $900 350 Gross margin 550 Operating expenses Salaries Depreciation Inventory loss from water damage $232 190 12 434 116 4 Total operating expenses Operating income Other income (expense) Gain on sale of cash equivalents Interest expense (40) Income before tax 80 Income tax expense 40 Net income $ 40 HAWKEYE COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2016 and 2015 Year Cash Accounts receivable Inventory Accounts payable Salaries payable Interest payable Income taxes payable 2016 2015Change $212 $200 $12 395 421 26) 10 210 234 24) 180 188(8) 860 850 55 50 90 104 14) Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method. (Amounts to be deducted should be indicated with a minus sign.)