The income statement of Rebecca Sherrick Company is shown below. LO3 REBECCA SHERRICK COMPANY Income Statement For the Year Ended December 31, 2004 Sales $7,100,000 Cost of goods sold Beginning inventory $1,700,000 Purchases 5,430,000 Goods available for sale 7,130,000 Ending inventory 1,920,000 Cost of goods sold 5,210,000 Gross profit 1,890,000 Operating expenses Selling expenses 380,000 Administrative expense 525,000 Depreciation expense 75,000 Amortization expense 30,000 1,010,000 Net income $ 880,000 Additional information:
1. Accounts receivable increased $490,000 during the year.
2. Prepaid expenses increased $170,000 during the year.

3. Accounts payable to merchandise suppliers increased $40,000 during the year.
4. Accrued expenses payable decreased $180,000 during the year.
Instructions Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2004, for Rebecca Sherrick Company using the indirect method.
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