Question

Tantan income statement revealed sales of $700,000; gross profitof $300,000; selling and administrative costs of $140,000; andincome taxes of $45,000. The selling and administrative expensesincluded $10,000 for depreciation. The company's operatingactivities generated positive cash flow of $129,000. Use the”direct” approach to demonstrate how this amount was calculated.The following additional information is available:Beginning-of-Period Balance End-of-Period Balance

Account receivable $70,000 $82,000

Inventory 50,000 41,000

Accounts payable 37,000 44,000