Cash flows from operating activities; presented below is the income statement of Angola, Inc.

Sales ................ $324,000

Cost of goods sold ......... $214,000

Gross profit ............ $110,000

Operating expenses ......... $67,000

Income before income taxes ...... $43,000

Income taxes ........... $17,200

Net income ............ $25,800

In addition, the following information related to net changes in working capital is presented.

Debit Credit

Cash ............... $10,600

Accounts receivable ......... $2,400

Inventories ............ $3,600

Salaries payable (operating expenses) ... $12,000

Accounts payable .......... $15,000

Income taxes payable ........ $1,400

Depreciation expense for the year was ... $14,700

Deferred tax liability account increased . $1,800

Required:

Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows-(b) using the direct method.