The 2012 accounting records of Liz Ten Transport reveal the following transactions and events. Prepare the cash flows from operating activities section using the direct method. (Not all of the items will be used.)

Payment of interest	$10,000	Collection of accounts receivable	$182,000
Cash sales	48,000	Payment of salaries and wages	53,000
Receipt of dividend revenue	18,000	Depreciation expense	16,000
Payment of income taxes	12,000	Proceeds from sale of vehicles	12,000
Net income	38,000	Purchase of equipment for cash	22,000
Payment of accounts payable for merchandising	115,000	Payment of dividends	14,000
Payment for land	74,000	Payment of operating expenses	28,000

Problem 2:

An inexperienced accountant for Nerys Corporation showed the following in the income statement: income before income taxes and extraordinary item $400,000, and extraordinary loss from flood (before taxes) $70,000. The extraordinary loss and taxable income are both subject to a 30% tax rate. Prepare a correct income statement.