PROBLEM 111 XYZ Corp Income Statement For the year ended December 31, 2010 Sales Cost of goods sold Gross profit $ 6,000,000 MS 2,600,000 Selling expenses 800,000 500.000 Administrative expenses Operating income Interest expense Income tax expense Net Income 1300,000 1,300,000 50,000 $ 1, 170,000 ADDITIONAL INFORMATION Accounts receivable decreased $150,000 during the year. 2. 1. Prepaid expenses increased $100,000 during the year 3. Accounts payable to suppliers of merchandise decreased $250,000 during the year 4. Inventory increased $400,000 during the year 5. Accrued expenses payable increased $200,000 during the year 6. Administrative expenses include depreiation expense of $400,000 7. Income tax payable decreased $20,000 during the year. Required : Prepare the Operating Activities section of Statement of Cash Flows using the Direct method. 0sh