Answer and Explanation:
The preparation of operating activities is given below:-
Statement of Cash Flows
Cash flows from operating activities
Net income $484,848
Adjustments to reconcile net income to net cash
Income statement items that is not affecting cash
Depreciation expense $37,296
Amortization expense - Patents $4,662
Less: Gain on sale of equipment ($6,216)
Changes in current operating assets and liabilities
Less: Increase in accounts receivable ($36,750)
Less: Increase in inventory ($24,550)
Less: Decrease in accounts payable ($13,850)
Less: Decrease in salaries payable ($2,900)
Net cash provided by operating activities $442,540
