The income statement of Breckenridge Company is presented here:

Additional information:
1. Accounts receivable decreased \(\$ 300,000\) during the year.
2. Prepaid expenses increased \(\$ 150,000\) during the year.
3. Accounts payable to suppliers of merchandise decreased \(\$ 300,000\) during the year 4. Accrued expenses payable decreased \(\$ 100,000\) during the year.
5. Administrative expenses include depreciation expense of \(\$ 60,000\).

\section*{Instructions}
Prepare the operating activities section of the statement of cash flows for the year ended November 30, 1998, for Breckenridge Company, using the indirect method.

Transcribed Image Text:

Sales BRECKENRIDGE COMPANY Income Statement For the Year Ended November 30, 1998 $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 Total 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