The income statement for Midd Inc a publicly traded company following IFRS is presented here

Midd Inc

Income statement

Year end December 31, 2014

Sales $6,800,000

Cost of Good Sold $3,250,000

Gross Profit $3,550,000

Operating Expenses $1,500,000

Profit from Operations $2,050,000

Interest Expense $150,000

Profit before Income Taxes $1,900,000

Income Taxes $400,000

Profit $1,500,000

Additional information

Operating expenses include $58,000 of depreciation expense and a $75,000 impairment loss on property, plant and equipment.

Accounts receivable decreased by $110,000

Merchandise inventory increased by $45,000

Prepaid expenses related to operating expenses increased by $65,000

Accounts payable to suppliers of merchandise decreased by $101,000

Accrued liabilities related to operating expenses increased by $22,000

Interest payable decreased by $14,000

Income tax payable increased by $35,000

Question

Prepare the operating activities section of the statement of cash flows using the Direct method. CANNOT USE INDIRECT METHOD