The income statement of Vincus Distribution follows

Additional Information
1. Account Receivable increased by $350,000 during the year
2. Prepaid Expenses increase by $170,000 during the year
3. Accounts payable to suppliers of merchandise decreased by $260,000 during the year.
4. Accrued salaries payable increased by $19,000 during the year
5. Administrative expenses include amortization expense of $60,000
6. Selling expenses include commissions and salaries of $300,000: administrative expenses included salaries of $525,000

Instructions:-
(a) Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2008 for Vincus Distributing using the direct method.
(b) Why are there so far captions in the operating activities section of the statement of cash flows?
What is the difference between this business and others that you have been dealing with in the exercises sofar?

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Vincus distributing Income Statement for the Year ended December 31,2008 Particulars Amount Amount Sales Cost of Goods sold Beginning inventory Purchases Goods available for sale Ending Inventory cost of goods sold $6.900.000 S 1,900,000 S 4.400.000 S 6,300,000 S 1.600,000 S4,700,000 $2.200.000 Gross profit Operating expenses Selling expenses Administrative expenses S 450,000 S 700,000 S1,150,000 Net income S1,050,000