Reference no: EM132599711

Using the following income statement and additional year-end information.

SONAD COMPANY

Income Statement

For Year Ended December 31

Sales $2,120,000

Cost of goods sold 1,038,800

Gross profit 1,081,200

Operating expenses Salaries expense $290,440

Depreciation expense 50,880

Rent expense 57,240

Amortization expenses-Patents 6,360

Utilities expense 23,320 428,240 652,960

Gain on sale of equipment 8,480

Net income $661,440

Accounts receivable $25,950 increase

Accounts payable $10,850 decrease

Inventory 19,050 increase

Salaries payable 5,700 decrease

Question 1: Prepare the operating activities section of the statement of cash flows using the direct method.