Answer:
Prepare the cash flows from operating activities section as follows :
Cash Flows from Operating Activities
Income before tax                                        172,000
Adjustments of Non- Cash Items :
Gain on sale of building                              ( 12,000)
Depreciation                                                 127,000
Loss on sale of equipment                             11,000
Adjustments of Changes in Working Capital :
Increase in Accounts Receivables            (120,000)
Decrease in Inventory                                  116,000
Decrease in Prepaid insurance                    34,000
Increase in Accounts payable                     105,000
Increase in Salaries Payable                         21,000
Increase in Deferred tax liability                   12,000
Decrease in Bond discount                         (22,000)
Net Cash flow from Operating Activities   444,000
Explanation:
Indirect Method Adjust the Net Income before tax with movements in working capital items and non-cash items included in income statements.