Reference no: EM132716833

The statement of income for Pharoah Ltd., a private company reporting under ASPE, is presented here:

PHAROAH LTD.
Statement of Income

Year Ended November 30, 2021

Sales $8,100,000

Cost of goods sold 4,500,000

Gross profit 3,600,000

Operating expenses 2,080,000

Income from operations 1,520,000

Interest expense 105,000

Income before income tax 1,415,000

income tax expense 310,000

Net income $1,105,000

Additional information regarding 2021:

1. Operating expenses include $76,000 of depreciation expense and a $103,000 impairment loss on property, plant, and equipment.

2. Accounts receivable increased by $189,000.

3. Inventory decreased by $60,000.

4. Prepaid expenses related to operating expenses increased by $45,000.

5. Accounts payable to suppliers of inventory decreased by $182,000.

6. Rent payable related to operating expenses decreased by $94,000.

7. Interest payable decreased by $14,000.

8. Deferred revenue received from customers decreased by $21,000.

9. Income tax payable increased by $23,000.

Problem (A) Prepare the operating activities section of the statement of cash flows, using the indirect method.