Portions of the financial statements for Horizon Telecom are provided below.Horizon TelecomIncome StatementFor the Year Ended December 31, 2021Revenues?$610,000Expenses:?? Cost of goods sold370,000? Operating expenses120,000? Depreciation expense32,000? Income tax expense44,000? Total expenses?566,000Net Income?$44,000Horizon TelecomSelected Balance Sheet DataDecember 31, 2021Increase in accounts receivable$6,000Increase in inventory13,000Decrease in prepaid rent9,000Increase in operating expenses payable5,000Decrease in accounts payable8,000Increase in income tax payable20,000Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method.
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| Horizon Telecom |
| Statement of Cash Flows |
| For the Year Ended December 31, 2021 |
Cash Flows from Operating Activities
| Net income | $44,000 | ? |
| Adjustments to reconcile net income to net cash flows from operating activities: | ? | ? |
| Depreciation expense | 32,000 | ? |
| Increase in accounts receivable | (6,000) | ? |
| Increase in inventory | (13,000) | ? |
| Decrease in prepaid rent | 9,000 | ? |
| Increase in operating expenses payable | 5,000 | ? |
| Decrease in accounts payable | (8,000) | ? |
| Increase in income tax payable | 20,000 | ? |
| Net cash flows from operating activities | ? | $83,000 |
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