The following income statement and additional year-end information is provided. Sales Cost of goods sold Gross profit SONAD COMPANY Income Statement For Year Ended December 31 Operating expenses Salaries expense Depreciation expense Rent expense Amortization expenses-Patents Utilities expense Gain on sale of equipment Net income Accounts receivable Inventory $ 212,076 37,152 41,796 4,644 17,028 Statement of Cash Flows (Partial) Cash flows from operating activities $ 1,548,000 758,520 789,480 312,696 476,784 6,192 $ 482.976 $ 43,150 increase Accounts payable 30,425 increase Salaries payable Prepare the operating activities section of the statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. $ 8,350 decrease 3,400 decrease

MONTGOMERY INCORPORATED Comparative Balance Sheets At December 31 Assets Cash Accounts receivable, net Inventory Total current assets Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Salaries payable Total current liabilities Equity Common stock, no par value Retained earnings Total liabilities and equity Current Year Prior Year \begin{tabular}{rr} $58,200 & $58,100 \\ 18,300 & 22,300 \\ 164,100 & 128,800 \\ \hline 240,600 & 209,200 \\ 90,900 & 76,200 \\ (41,000) & (28,100) \\ \hline$290,500 & $257,300 \\ \hline \end{tabular} \begin{tabular}{rr} $43,600 & $46,600 \\ 900 & 1,100 \\ \hline 44,500 & 47,700 \end{tabular} \begin{tabular}{|r|r|} 202,500 & 185,700 \\ 43,500 & 23,900 \\ \hline$290,500 & $257,300 \\ \hline \end{tabular} MONTGOMERY INCORPORATED Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gros 5 profit Salanies expense Depreciation expense Income before taxes Income tax expense \begin{tabular}{r} $83,500 \\ (34,600) \\ \hline 48,900 \\ 10,300 \\ 12,900 \\ \hline 25,700 \\ 6,100 \\ \hline$19,600 \end{tabular} Net income