Using the following income statement and additional year-end information.

SONAD COMPANY

Income Statement

For Year Ended December 31Sales$2,120,000Cost of goods sold1,038,800Gross profit1,081,200Operating expensesSalaries expense$290,440Depreciation expense50,880Rent expense57,240Amortization expensesPatents6,360Utilities expense23,320428,240652,960Gain on sale of equipment8,480Net income$661,440

Accounts receivable$25,950increaseAccounts payable$10,850decreaseInventory19,050increaseSalaries payable5,700decrease

Prepare the operating activities section of the statement of cash flows using the direct method.