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The income statement of Sandhill Company is shown below SANDHILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31,2017 $6,920,000 Sales revenue Cost of goods

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The income statement of Sandhill Company is shown below SANDHILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31,2017 $6,920,000 Sales revenue Cost of goods sold $1,910,000 Beginning inventory Purchases 4,420,000 Goods available for sale 6,330,000 Ending inventory 1,590,000 Cost of goods sold 4,740,000 Gross profit 2,180,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 1,150,000 $1,030,000 Net income Additional information: Accounts receivable decreased $350,000 during the year 1. Prepaid expenses increased $170,000 during the year. 2. 3. Accounts payable to suppliers of merchandise decreased $280,000 during the year. Accrued expenses payable decreased $90,000 during the year. 4. Administrative expenses include depreciation expense of $60,000 5. Prepare the operating activities section of the statement of cash flows using the direct method. SANDHILL COMPANY Statement of Cash Flows (Partial)

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