P12-3A Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2017, using the indirect method. Hint: Calculate the decrease in inventory. Check: Net cash provided by Operating Activities is $1,940,000. Income Statement For the Year Ended November 30, 2017 Sales revenue $7,600,000 Cost of goods sold Beginning inventory $1,900,000 Purchases 4.400.000 Goods available for sale 6,300.000 Ending inventory 1,600,000 Total cost of goods sold $4,700,000 Gross profit $2,900,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 | Net income $1,750,000 Additional information: 1. Accounts receivable decreased $380,000 during the year, and inventory decreased $300,000. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $350,000 during the year. 4. Accrued expenses payable decreased $100,000 during the year. 5. Administrative expenses include depreciation expense of $110,000. *P12-4A Using the data presented in P12-3A, prepare the operating activities section of the statement of cash flows using the direct method. Check: Net cash provided by Operating Activities is $1,940,000. Statement of Cash Flows-Direct Method Dollar Amounts: Cash flows from operating activities: Cash receipts from customers Cash Payments: To suppliers For operating expenses Net cash provided by operating activities $1,940,000 Computations: (1) Cash receipts from customers Sales ................... $ Add: Decrease in accounts receivable .................. Cash receipts from customers ... ................ $ (2) Cash payments to suppliers Cost of goods sold .......... ......................... Deduct: Decrease in inventories ......... Cost of purchases .. .. 4,400,000 Add: Decrease in accounts payable ...... Cash payments to suppliers ........... $4,750,000 (3) Cash payments for operating expenses Operating expenses, exclusive of depreciation .............. $1,040,000* Add: Increase in prepaid expenses Decrease in accrued expenses payable Cash payments for operating expenses ....... *$450,000 + ($700,000 $110,000)