Carmel Company's comparative balance sheet and income statement for last year appear below:
Statement of Financial Position
|
Ending
|
Beginning
|
|
Balance
|
Balance
|
|
Cash
|
$ 49,000
|
$ 30,000
|
|
Accounts receivable
|
23,000
|
30,000
|
|
Inventory
|
63,000
|
49,000
|
|
Prepaid expenses
|
13,000
|
19,000
|
|
Long-term investments
|
260,000
|
200,000
|
|
Plant and equipment
|
520,000
|
500,000
|
|
Accumulated depreciation
|
(256,000)
|
(224,000)
|
|
Total assets
|
$672,000
|
$604,000
|
|
Accounts payable
|
$ 20,000
|
$ 35,000
|
|
Accrued liabilities
|
30,000
|
17,000
|
|
Taxes payable
|
15,000
|
11,000
|
|
Bonds payable
|
100,000
|
150,000
|
|
Deferred taxes
|
23,000
|
16,000
|
|
Common stock
|
100,000
|
70,000
|
|
Retained earnings
|
384,000
|
305,000
|
|
Total liabilities and owners' equity
|
$672,000
|
$604,000
|
Income Statement
|
Sales
|
$810,000
|
|
Less cost of goods sold
|
390,000
|
|
Gross margin
|
420,000
|
|
Less operating expenses
|
290,000
|
|
Net operating income
|
130,000
|
|
Less income taxes
|
39,000
|
|
Net income
|
$ 91,000
|
The company declared and paid $12,000 in cash dividends during the year.
Required:
Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.