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Ferragosto's Imported Goods, Ltd. recently issued its annual report for the current year. Its comparative balance sheets for the current year follow. (Click the icon to view the balance sheets.) (Click the icon to view the income statement.) Prepare the operating activities section of the statement of cash flows using the direct method. Assume that accrued expenses relate to selling, general, and administrative expenses. (Use a minus sign or parentheses for any numbers to be subtracted. If an input field is not used in the statement, leave the field empty; do not select a label or enter a zero.) Ferragosto's Imported Goods, Ltd. Partial Statement of Cash Flows (Direct Method) For the Year Ended December 31 Operating Activities: Amount Net Cash Provided (Used) by Operating Activities Comparative Balance Sheets Ferragosto's Imported Goods, Ltd. Balance Sheets at December 31 Assets Ending Beginning Current Assets Cash Accounts Receivable - net 26,100 $ 35,100 30,100 51,600 Merchandise Inventory 19,800 11,000 43,000 2,300 Prepaid Rent $ 87,000 $ 132,000 Total Current Assets Noncurrent Assets Property, Plant, and Equipment - net $ 103,000 $ 52,000 74,700 112,300 Indefinite-Life Intangible Assets Total Noncurrent Assets $ 155,000 $ 187,000 $ 242,000 $ 319,000 Total Assets - Comparative Balance Sheets Liabilities Current Liabilities Accounts Payable Accrued Expenses $ 20,300 $ 17,600 14,700 18,700 21,700 17,200 Income Taxes Payable $ 52,600 $ 57,600 Total Current Liabilities Noncurrent Liabilities $ Notes Payable 86,200 $ 183,000 $ Total Noncurrent Liabilities 86,200 $ 183,000 $ 138,800 $ 240,600 Total Liabilities Shareholders' Equity Common Stock, $1 par value Additional Paid-in Capital in Excess of Par - Common 15,400 $ 8,800 40,500 47,300 30,500 39,100 Retained Earnings $ Total Shareholders' Equity 103,200 $ 78,400 242,000 $ 319,000 Total Liabilities and Shareholders' Equity - Income statement Ferragosto's Imported Goods, Ltd. Income Statement For the Year Ended December 31 Sales $ 138,400 80,500 Cost of Goods Sold Gross Profit $ 57,900 Selling, General, and Administrative Expenses $ 23,800 8,700 Depreciation Expense $ 32,500 Total Operating Expenses Operating Income $ 25,400 (5,900) $ Interest Expense Income before Tax $ 19,500 (7,200) Income Tax Expense $ 12,300 Net Income

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