The following income statement and selected balance sheet account data are available for Treece,

Inc., at December 31, 2011:

Additional Information
1. Dividend revenue is recognized on the cash basis. All other income statement amounts are recognized on the accrual basis.
2. Operating expenses include depreciation expense of $115,000.
Instructions
a. Prepare a partial statement of cash flows, including only the operating activities section of the statement and using the direct method. Place brackets around numbers representing cash payments. Show supporting computations for the following:
1. Cash received from customers
2. Interest and dividends received
3. Cash paid to suppliers and employees
4. Interest paid
5. Income taxes paid
b. Management of Treece, Inc., is exploring ways to increase the cash flows from operations.
One way that cash flows could be increased is through more aggressive collection of receivables. Assuming that management has already taken all the steps possible to increase revenue and reduce expenses, describe two other ways that cash flows from operations could beincreased.

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TREECE, INC. INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2011 Revenue Net sales Dividend income Interest income Gain on sales of marketable securities-... $2,850,000 104,000 70,000 4,000 $3,028,000 Total revenue and gains Costs and expenses Cost of goods sold Operating expenses Interest expense Income tax expense $1,550,000 980,000 185,000 90,000 . . . . . .. Total costs and expenses.. Net income 2,805,000 $ 223,000 End of Year Beginning of Year Selected account balances: ..$ 650,000 720,000 6,000 765,000 15,000 Accounts payable (merchandise suppliers)..z 570,000 562,000 94,000 12,000 35,000 Accounts receivable.... Accrued interest receivable Inventories.... Short-term prepayments . 9,000 20,000 Accrued operating expenses payable . 65,000 21,000 22,000 Accrued income taxes payable