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1.Gold Company's comparative balance sheet and income statement for last year appear below:

Statement of Financial Position

Ending

Beginning

Balance

Balance

Cash...........................................................

$70,000

$38,000

Accounts receivable..................................

76,000

52,000

Inventory....................................................

24,000

42,000

Prepaid expenses.......................................

8,000

16,000

Long-term investments..............................

260,000

210,000

Plant and equipment..................................

530,000

510,000

Accumulated depreciation.........................

(398,000)

(350,000)

Total assets................................................

$570,000

$518,000

Accounts payable.......................................

$32,000

$54,000

Accrued liabilities......................................

34,000

25,000

Taxes payable............................................

4,000

11,000

Bonds payable...........................................

160,000

200,000

Deferred taxes............................................

38,000

25,000

Common stock...........................................

150,000

120,000

Retained earnings......................................

152,000

83,000

Total liabilities and owners' equity...........

$570,000

$518,000

Income Statement

Sales...........................................................

$610,000

Cost of goods sold.....................................

310,000

Gross margin.............................................

300,000

Selling and administrative expense...........

190,000

Net operating income................................

110,000

Income taxes..............................................

33,000

Net income.................................................

$77,000

The company declared and paid $8,000 in cash dividends during the year.

Required:

Construct in good form the operating activities section of the company's statement of cash flows for the year using the direct method.

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