The income statement of Guesser Company is shown below.
GUESSER COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2007
Sales $755,000
Cost of goods sold 543,000
Gross profit 212,000
Operating expenses
Selling expenses $52,000
Administrative expenses 89,000 141,000
Net income $71,000
Additional information:
1. Accounts receivable decreased $63,000 during the year.
2. Inventory increased $38,000 during the year.
3. Prepaid expenses increased $12,000 during the year.
4. Accounts payable to increased $25,000 during the year.
5. Accrued expenses payable increased $6,000 during the year.
6. Administrative expenses include depreciation expense of $20,000.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2007, for Guesser Company, using the indirect method.