Reference no: EM132573929

Question - Sheridan Ltd. reported the following for the fiscal year 2021:

SHERIDAN LTD. Income Statement Year Ended September 30, 2021

Sales $577,000

Cost of goods sold 332,000

Gross profit 245,000

Operating expenses $103,000

Depreciation expense 28,000

Gain on sale of land (38,000) 93,000

Profit before income tax 152,000

Income tax expense 38,000

Profit $114,000

Additional information:

1. Accounts receivable decreased by $15,700 during the year.

2. Inventory increased by $7,200 during the year.

3. Prepaid expenses decreased by $5,200 during the year.

4. Accounts payable to suppliers increased by $10,700 during the year.

5. Accrued expenses payable increased by $4,700 during the year.

6. Income tax payable decreased by $6,500 during the year.

Required - Prepare the operating activities section of the cash flow statement using the direct method.