The income statement of Blue Company is shown below. BLUE COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,910,000 Cost of goods sold Beginning inventory $1,920,000 Purchases 4,400,000 Goods available for sale 6,320,000 Ending inventory 1,600,000 Cost of goods sold 4,720,000 Gross profit 2,190,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 1,150,000 Net income $1,040,000 Additional information: 1. Accounts receivable decreased $370,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $250,000 during the year. 4. Accrued expenses payable decreased $90,000 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.