Use the following information to answer the next three questions. The incom

Use the following information to answer the next three questions.

The income statement and additional data for Frances Company for the year ended December 31. 2006. Follows

Sales revenue

$400000

Cost of goods sold

$165000

Salary expense

$ 70000

Depreciation expense

$ 55000

Insurance expense

$ 20000

Interest expense

$ 10000

Income tax expense

$ 18000

Net income

$ 62000

Accounts receivable decreased by $12000. Inventories increased by $6000 and accounts payable decreased by $2000. Salaries payable increased by $8000.
Prepaid insurance increased by $4000. Interest expense and income tax expense equal their cash amounts. Frances Company uses the direct method for its
statement of cash flows.