M12-5 computing cash flows from operating activities (indirect method) [lo 12-2] the two independent cases are listed below: case a case b year 2 year 1 year 2 year 1 sales revenue $ 11,600 $ 12,000 $ 21,600 $ 21,000 cost of goods sold 6,540 8,700 12,540 12,940 gross profit 5,060 3,300 9,060 8,060 depreciation expense 1,000 1,000 1,800 1,800 salaries and wages expense 1,900 1,400 5,600 5,600 net income 2,160 900 1,660 660 accounts receivable 330 460 810 630 inventory 780 560 760 860 accounts payable 860 730 860 940 salaries and wages payable 1,030 1,260 230 310

show the operating activities section of the statement of cash flows for year 2 using the indirect method. (amounts to be deducted should be indicated with a minus sign.)

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept,the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year.to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51