Income Statement
Year Ended December 31, 2020
Sales $5,200,000 Cost of Goods Sold $3,155,000
Gross Profit $2,045,000
Operating Expenses $1,025,000 (includes $45, 000 depreciation and $50, 000 impairment)
Profit from Operations Interest Expense $1,020,000
Interest Expense $120,000
Profit before Income Taxes Income Taxes. $900,000
Income Taxes $230,000
Profit $670,000
Operating expenses include $50,000 of depreciation expense and a $45,000 impairment loss on property, plant and equipment.
Accounts Receivable increased by $100,000
Merchandise Inventory increased by $45,000
Prepaid expenses related to operating expenses increased by $35,000
Accounts Payable to suppliers of merchandise decreased by $90,000
Accrued liabilities related to operating expenses decreased by $55,000
Interest Payable increased by $55,000
Income tax payable increased by $35,000
Question 1: Prepare the operating activities section of the statement of cash flows using the Indirect Method.
