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Based on the Information in the Following Income Statement and Balance

Question 225

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Based on the information in the following income statement and balance sheet for Monterey Corporation,determine the cash flows from operating activities using the direct method.
Monterey Corporation Income Statement For Year Ended December 31,20X2 Sales $504,000 Cost of goods sold 327,600 Depreciation 42,000 Other operating expenses 125,500(495,100) Other gains (losses):  Gain on sale of equipment 7,200 Income before taxes 16,100 Income tax expense (4,800) Net income $11,300\begin{array}{c}\text {Monterey Corporation}\\\text { Income Statement }\\\text {For Year Ended December \( 31,20 \mathrm{X} 2 \)}\\\begin{array}{|l|l|l|}\hline \text { Sales } & & \$ 504,000 \\\hline \text { Cost of goods sold } & 327,600 & \\\hline \text { Depreciation } & 42,000 & \\\hline \text { Other operating expenses } & 125,500 & (495,100) \\\hline \text { Other gains (losses): } & & \\\hline \text { Gain on sale of equipment } & & 7,200 \\\hline \text { Income before taxes } & & 16,100 \\\hline \text { Income tax expense } & & (4,800) \\\hline \text { Net income } & & \$ 11,300 \\\hline\end{array}\end{array}
Based on the information in the following income statement and balance sheet for Monterey Corporation,determine the cash flows from operating activities using the direct method. \begin{array}{c} \text {Monterey Corporation}\\ \text { Income Statement }\\ \text {For Year Ended December 31,20 \mathrm{X} 2 }\\\begin{array}{|l|l|l|} \hline \text { Sales } & & \$ 504,000 \\ \hline \text { Cost of goods sold } & 327,600 & \\ \hline \text { Depreciation } & 42,000 & \\ \hline \text { Other operating expenses } & 125,500 & (495,100) \\ \hline \text { Other gains (losses): } & & \\ \hline \text { Gain on sale of equipment } & & 7,200 \\ \hline \text { Income before taxes } & & 16,100 \\ \hline \text { Income tax expense } & & (4,800) \\ \hline \text { Net income } & & \$ 11,300 \\ \hline \end{array}\end{array}

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