Question 5: You are provided the following balance sheet information and summarized income statement for Katrime Ltd.: Katrime Ltd. Current Operating Assets and Liabilities as of May 31, 2013 and 2014 2014 2013 2014 2013 Accounts receivable $320,250 $208,500 Accounts payable $294,000 $236,250 Inventory 673,500 424,500 Wages payable 54,000 63,750 Prepaid insurance 54,000 26,250 Katrime Ltd. Income Statement for the Year Ended May 31, 2014 Revenue Cost of goods sold Gross margin Wages expense Depreciation expense Insurance expense Other expenses Loss on sale of capital assets Net income $1,235,750 551,625 684,125 249,750 31,875 22,500 103,125 20,625 $ 256,250 All sales are credit sales. Accounts payable pertains exclusively to the purchase of inventory. Other expenses were fully paid in cash during the year. Required: 1) Prepare Katrime's cash from operations section of the cash flow statement using the indirect method. 2) Calculate these amounts: a. cash collected from customers b. cash paid to suppliers of inventory c. cash paid to employees 3) Use this information to prepare Katrime's cash from operations section of the cash flow statement using the direct method.