Granville Manufacturing Company

Income Statement

For the year ended December $31$

The following balance sheet changes occurred during the year:

Accounts receivable increased by $$878,800.$

Inventory increased by $$100,325.$

Prepaid expenses decreased by $$64,100.$

Accounts payable increased by $$43,850.$

Salaries payable increased by $$54,900.$

Required:

Prepare the cash flows from operating activities section of the statement of cash flows, using the direct method. Use a minus sign to indicate any decreases in cash or cash outflows.

Granville Manufacturing Company

Statement of Cash Flows $($Partial$)$

Using Direct Method