LO 4 Preparing a Schedule of Cash Flows from Operating Activities-Direct Method was depreciation expense of 2,300 and amortisation expense of 300 . During the year, accounts receivable increased by 3,400 , inventories decreased by 1,900 , prepaid expenses decreased by 200 , accounts payable increased by 5,000 , and accrued liabilities decreased by 450 . Determine cash flows from operating activities using the indirect method.

The income statement for the Karsko Corporation appears below. The following is additional information:

(a) All sales were on credit, and accounts receivable increased by 4,400 during the year;

(b) all goods purchased were on credit; inventories increased by 7,000 , and accounts payable increased by 14,000 during the year;

(c) prepaid rent decreased by 1,400 , while salaries payable increased by 1,000 ; and

(d) income taxes payable decreased by 600 during the year. Prepare a schedule of cash flows from operating activities using the direct method.

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Karsko Corporation Income Statement For the Year Ended June 30, 20xx Sales 122,000 Cost of Goods Sold 60,000 Gross Profit Operating Expenses 62,000 Salaries Expense 32,000 Rent Expense 16,800 Depreciation Expense 2,000 50,800 Profit before Income Taxes 11,200 Income Taxes 2,400 Net Profit 8,800