Based on the following income statement and balance sheet for Botanical Genetics Corporation, determine the cash flows from operating activities using the direct method.
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Botanical Genetics Corporation
Income Statement
For Year Ended December 31, 2013
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Sales
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$504,000
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Cost of goods sold
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327,600
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Depreciation
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42,000
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Other operating expenses
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125,500
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(495,100)
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Other gains (losses):
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Gain on sale of equipment
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7,200
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Income before taxes
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16,100
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Income tax expense
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(4,800)
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Net income
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$ 11,300
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Botanical Genetics Corporation
Balance Sheets
At December 31
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2013
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2012
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Cash
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$64,650
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$55,800
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Accounts receivable
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21,000
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29,000
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Inventory
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58,000
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52,100
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Equipment
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240,000
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222,000
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Accumulated depreciation
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(106,000)
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(96,000)
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Total assets
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$277,650
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$262,900
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Liabilities:
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Accounts payable
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$28,400
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$23,700
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Income taxes payable
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1,050
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1,200
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Total liabilities
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$29,450
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$24,900
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Equity:
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Common stock
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$106,000
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$106,000
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CC in excess
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18,000
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18,000
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Retained earnings
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124,200
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114,000
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Total equity
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$248,200
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$238,000
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Total liabilities and equity
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$277,650
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$262,900
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