CALCULATOR $5,210,000 Question 1 The income statement of Pearl Company is shown below. PEARL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue Cost of goods sold Beginning inventory $2,070,000 Purchases 4,570,000 Goods available for sale 6,640,000 Ending inventory 1,490,000 Cost of goods sold Gross profit Operating expenses Selling expenses 450,000 Administrative expenses 570,000 Net income 5,150,000 1,060,000 1,020,000 $40,000 Additional information: 1. Accounts receivable decreased $300,000 during the year. 2. Prepaid expenses increased $170,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $60,000 Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, for Pearl Company, using the Indirect method. (Show flow with either a signe.g. -15,000 or in parenthesis e.g. (15,000).) PEARL COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net Income 40,000 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation expense $ 60,000 Decrease in Accounts Receivable 300,000 Increase in Prepaid Expenses -170,000 Decrease in Accounts Payable -300,000 Decrease in Accrued Expenses Payable -110,000 Decrease in Inventory 580,000 Net Cash Provided by Operating Activities $