Reference no: EM132498325

Presented below is the latest income statement of Oxford Ltd.:

Sales                              $380,000

Cost of goods sold            225,000

Gross profit                      $155,000

Operating expenses             85,000

Income before income taxes 70,000

Income taxes                     28,000

Net income                        $ 42,000

In addition, the following information related to net changes in working capital is available:

Cash $12,000 Debit

Accounts Receivable (net) 8,000 Debit

Inventories $19,400 Credit

Salaries payable (operating expenses) 6,000 Debit

Accounts Payable 9,000 Credit

Income tax payable 3,000 Debit

• Oxford Ltd. also reports that depreciation expense for the year was $13,700 and that the deferred tax liability account increased $2,600.

Required:

Question 1: Prepare the operating activities section that would be shown on a statement of cash flows using the direct method.