Requirement:

Prepare the operating activities section of a cash flow statement, in good form, for Brice Company for the year ended December 31, 2014. Use the direct method.

2014 Income Statement: Sales Revenue Cost of goods sold Gross profit Operating expenses (includes $200,000 depreciation expense) Pretax income Income tax expense (30% rate ) Net Income $ 8,200,000 6,400,000 1,800,000 1,250,000 550,000 165,000 $ 385,000 Balance Sheet: Accounts receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Income taxes payable Unearned revenue 2014 $ 800,000 520,000 110,000 340,000 80,000 25,000 100,000 2013 $ 600,000 480,000 120,000 310,000 90,000 40,000 200,000