Following are the income statement and some additional information for Carolina Consulting

Company.

Carolina Consulting Company Income Statement For the Year Ended December 31, 2018 Net sales       $ 18,000     Cost of goods sold         (3,100 )   Gross margin         14,900     Operating expenses $ 3,600           Depreciation expense   1,700     (5,300 )   Income before taxes         9,600     Income taxes         (3,200 )   Net income       $ 6,400       

All sales were on credit and accounts receivable decreased by $1,060 in 2018 compared to 2017. Merchandise purchases were on credit with a decrease in accounts payable of $860 during the year. Ending inventory was $660 larger than beginning inventory. Income taxes payable increased $460 during the year. All operating expenses were paid for in cash.

Required:

Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.)

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