The income statement of Marquette Company is presented below.

activities section—indirect Additional information:

method. :

(SO 4) 1. Accounts receivable decreased $520,000 during the year, and inventory increased $140,000. 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 $165,000 during the year.

MARQUETTE COMPANY Income Statement For the Year Ended December 31, 2007 Sales $5,400,000 Cost of goods sold Beginning inventory $1,780,000 Purchases _ 3,430,000 Goods available for sale 5,210,000 Ending inventory 1,920,000 Total cost of goods sold 3,290,000 Gross profit 2,110,000 Operating expenses Selling expenses 420,000 Administrative expense 525,000 Depreciation expense 105,000 Amortization expense 20,000 1,070,000 Net income $1,040,000 Cash from operations Instructions

$1,585,000 Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2007, for Marquette Company, using the indirect method.

Prepare the operating activities section—direct *“