Prepare the operating activities section of the statement of cash flows using the direct method

Comparative balance sheet accounts of Marcus Inc. are presented below. MARCUS INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2014 AND 2013 December 31 Debit Accounts 2014 2013 Cash $41,890 $33,360 Accounts Receivable 70,470 59,950 Inventory 29,220 24,550 Investments (available-for-sale) 22,480 38,450 Machinery 30,330 19,030 Buildings 67,010 55,980 Land 7,900 7,900 $269,300 $239,220 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par $2,390 6,320 13,540 35,100 SE3,077 20,640 149,500 $1,150 2,190 8,350 24,180 2,794 31,270 124,600 Retained Earnings 38,733 $269,300 44,686 $239,220 Additional data (ignoring taxes): 1. Net income for the year was $40,417. 2. Cash dividends declared and paid during the year were $21,470. 3. A 20% stock dividend was declared during the year. $24,900 of retained earnings was capitalized. 4. Investments that cost $24,710 were sold during the year for $28,150. 5. Machinery that cost $3,590, on which $767 of depreciation had accumulated, was sold for $1,952 G. Assume Accrued payabus related to Operating Expenses. Marcus's 2014 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $10,087 depreciation and $5,910 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $539,238 380,500 158,738 120,890 37,848 $3,440 (871) 2,569 $40,417