The following income statement and selected balance sheet account

The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2011:TREECE, INC. INCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2011Revenue:Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$2,850,000Dividend income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104,000Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70,000Gain on sales of marketable securities . . . . . . . . . . . . . . . . . . . 4,000Total revenue and gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Costs and expenses:$3,028,000Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$1,550,000Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .980,000Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .185,000Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000Total costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,805,000Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 223,000Selected account balances:End of BeginningYear of YearAccounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 650,000$ 720,000Accrued interest receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . .9,0006,000Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .800,000765,000Short-term prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,00015,000Accounts payable (merchandise suppliers) . . . . . . . . . . . . . . . .570,000562,000Accrued operating expenses payable . . . . . . . . . . . . . . . . . . . .65,00094,000Accrued interest payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21,00012,000Accrued income taxes payable. . . . . . . . . . . . . . . . . . . . . . . . . .22,00035,000Additional Information1. Dividend revenue is recognized on the cash basis. All other income statement amounts are recognized on the accrual basis.2. Operating expenses include depreciation expense of $115,000.Instructionsa. Prepare a partial statement of cash flows, including only the operating activitiessection of the statement and using the direct method. Place brackets around numbers representing cash pay- ments. Show supporting computations for the following:1. Cash received from customers2. Interest and dividends received3. Cash paid to suppliers and employees4. Interest paid5. Income taxes paidb. Management of Treece, Inc., is exploring ways to increase the cash flows from operations. One way that cash flows could be increased is through more aggressive collection of receiv- ables. Assuming that management has already taken all the steps possible to increase rev- enue and reduce expenses, describe two other ways that cash flows from operations could be increased.