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he income statement of Booker T Industries Inc. for the current year ended June 30 is as follows:

1	Sales		$513,000.00
2	Cost of goods sold		295,400.00
3	Gross profit		$217,600.00
4	Operating expenses:
5	Depreciation expense	$39,730.00
6	Other operating expenses	105,620.00
7	Total operating expenses		145,350.00
8	Income before income tax		$72,250.00
9	Income tax expense		21,900.00
10	Net income		$50,350.00

Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:

	Increase (Decrease)
Accounts receivable (net)	($11,600)
Inventories	3,510
Prepaid expenses	(3,160)
Accounts payable (merchandise creditors)	(8,950)
Accrued expenses payable (operating expenses)	1,100
Income tax payable	(1,690)

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required.

b. What does the direct method show about a companys cash flows from operating activities that is not shown using the indirect method?

X

Amount Descriptions

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