The income statement of Vince Gill Company is shown below.

VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue		$6,900,000
Cost of goods sold
Beginning inventory	$1,900,000
Purchases	4,400,000
Goods available for sale	6,300,000
Ending inventory	1,600,000
Cost of goods sold		4,700,000
Gross profit		2,200,000
Operating expenses
Selling expenses	450,000
Administrative expenses	700,000	1,150,000
Net income		$1,050,000

Additional information:

1. Accounts receivable decreased $360,000 during the year.

2. Prepaid expenses increased $170,000 during the year.

3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.

4. Accrued expenses payable decreased $100,000 during the year.

5. Administrative expenses include depreciation expense of $60,000.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, for Vince Gill Company, using the indirect method.

Answer rating: 100% (QA)

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