The income statement of Guesser Company is shown below.

GUESSER COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2014

Sales $755,000

Cost of goods sold 543,000

Gross profit 212,000

Operating expenses

Selling expenses $52,000

Administrative expenses 89,000 141,000

Net income $ 71,000

Additional information:

1. Accounts receivable decreased $63,000 during the year.

2. Inventory increased $38,000 during the year.

3. Prepaid expenses increased $12,000 during the year.

4. Accounts payable to increased $25,000 during the year.

5. Accrued expenses payable increased $6,000 during the year.

6. Administrative expenses include depreciation expense of $20,000.

7. Periodic inventory method was used.

Instructions

Prepare the operating activities section of the statement of cash flows using the direct method for December 31, 2014.