Exercise 23-4 Your answer is partially correct. Try again. The income statement of Waterway Company is shown below. WATERWAY COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,920,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,360,000 Goods available for sale 6,240,000 Ending inventory 1,600,000 Cost of goods sold 4,640,000 Gross profit 2,280,000 Operating expenses Selling expenses 440,000 Administrative expenses 710,000 Net income 1,150,000 $1,130,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $270,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method. WATERWAY COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash Flows from Operating Activities Decrease in Accounts Receivable Increase in Prepaid Expenses Decrease in Inventory Net Cash Provided by Operating Activities