1)The income statement of Stewart Limited is shown below:

STEWART LIMITED

Income Statement

Year Ended December 31, 2021

Sales

$

9,000,000 Cost of goods sold

5,400,000

Gross profit

3,600,000

Operating expenses

Selling and administrative expenses

$ 1,400,000

Depreciation expense

120,000

1,520,000

Profit

$

2,080,000 Additional information:

1.	Accounts receivable decreased $300,000 during the year.

2.	Inventory decreased $175,000 during the year.

3.	Prepaid expenses increased $200,000 during the year.

4.	Accounts payable to merchandise suppliers increased $160,000 during the year.

5.	Accrued expenses payable increased $120,000 during the year.

Instructions Prepare the operating activities section of the cash flow statement for the year ended December 31, 2021, for Stewart Limited, using the direct method.