Suppose a recent income statement for McDonald’s Corporation (USA) shows cost of goods sold \($4,527.8\) million and operating expenses (including depreciation expense of \($1,120\) million) \($10,517.6\) million. The comparative statements of financial position for the year show that inventory increased \($17.1\) million, prepaid expenses increased \($65.3\) million, accounts payable (merchandise suppliers) increased \($139.6\) million, and accrued expenses payable increased \($190.6\) million.

Instructions Using the direct method, compute

(a) cash payments to suppliers and

(b) cash payments for operating expenses.

Compute cash flow from operating activities—direct method.