The income statement of Asquith Company is presented on the next page. Additional information:1. Accounts receivable decreased $320,000 during the year, and inventory increased $120,000.2. Prepaid expenses increased $175,000 during the year.3. Accounts payable to merchandise suppliers increased $50,000 during the year.4. Accrued expenses payable increased $155,000 during the year.

InstructionsPrepare the operating activities section of the statement of cash flows for the year ended December 31, 2012, for Asquith Company, using the indirectmethod.

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ASQUITH COMPANY Income Statement For the Year Ended December 31, 2012 $5,400,000 Sales revenue Cost of goods sold Beginning inventory $1,780.000 Purchases 3.430,000 Goods available for sale 5,210,000 Ending inventory 1,900,000 3.310,000 Total cost of goods sold Gross profit Operating expenses Depreciation expense Amortization expense Other expenses 2,090,000 105,000 20,000 945,000 1,070,000 $1.020.000 Net income