The income statement of Larkspur Company is shown below.

LARKSPUR COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,950,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,420,000 Goods available for sale 6,300,000 Ending inventory 1,580,000 Cost of goods sold 4,720,000 Gross profit 2,230,000 Operating expenses Selling expenses 440,000 Administrative expenses 690,000 1,130,000 Net income $1,100,000

Additional information:

1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $190,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $100,000 during the year. 5. Administrative expenses include depreciation expense of $70,000.

Prepare the operating activities section of the statement of cash flows using the direct method.