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Presented below is the income statement of Jack, Inc.: Sales $380,000 Cost of goods sold 225,000 Gross profit $155,000 Operating expenses 85,000 Income before income

Presented below is the income statement of Jack, Inc.:

Sales $380,000

Cost of goods sold 225,000

Gross profit $155,000

Operating expenses 85,000

Income before income taxes 70,000

Income taxes 28,000

Net income $ 42,000

In addition, the following information related to net changes in working capital is presented: . Debit Credit

Cash.........................................................................................................................D/$12,000

Accounts receivable................................................................................................D/25,000

Inventories ......................................................................................................................................C/$19,400

Salaries payable (operating expenses)....................................................................D/6,000

Accounts payable.............................................................................................................................C/14,000

Income taxes payable...............................................................................................D/4,000

The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.

Instruction: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows using the DIRECT METHOD:

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