Exercise 23B-4 The income statement of Pharoah Company is shown below PHAROAH COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,840,000 Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold $1,920,000 4,390,000 6,310,000 1,580,000 4,730,000 2,110,000 Gross profit Operating expenses Selling expenses Administrative expenses 460,000 710,000 1,170,000 $940,000 Net income Additional information 1. Accounts receivable decreased $350,000 during the year 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $280,000 during the year. 4. Accrued expenses payable decreased $100,000 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 PHAROAH COMPANY Statement of Cash Flows (Partial)