Exercise 23-4 The income statement of Cullumber Company is shown below. CULLUMBER COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,850,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,410,000 Goods available for sale 6,290,000 Ending inventory 1,610,000 Cost of goods sold 4,680,000 Gross profit 2,170,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,010,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.