The following information is from the comparative balance sheets of Discovery Tech Corporation at June 30, 2011 and 2010:

Net income for the year ended June 30, 2011, was $425,000. Depreciation expense of $105,000 was included in the operating expenses for the year.

Requirement
Use the indirect method to prepare the cash from operations section of the statement of cash flows for Discovery Tech Corporation for the year ended June 30,2011.

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(in thousands) Current assets: At June 30 2011 2010 Cash Accounts receivable Inventory Prepaid insurance Total current assets $2,750$2,115 2,750 1,025 320 7,720 $6,210 3,000 1,700 270 Current liabilities: $1,800 $1,750 Accounts payable Salaries payable 3,750 $3.150 $5,550 $4,900 Total current liabilities