The income statement of Vaughn Company is shown below. Vaughn Company Income Statement For the Year Ended December 31, 2025 Sales revenue $6,870,000 Cost of goods sold Beginning inventory $1,890,000 Purchases 4,360,000 Goods available for sale 6,250,000 Ending inventory 1,620,000 Cost of goods sold 4,630,000 Gross profit 2,240,000 Operating expenses Selling expenses 450,000 Administrative expenses 700,000 1,150,000 Net income $1,090,000 Additional information: Additional information: 1. Accounts receivable decreased $340,000 during the year. 2. Prepaid expenses increased $170,000 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 $60,000. Prepare the operating activities section of the statement of cash flows using the direct method. VAUGHN COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Receipts from Customers Cash Payments to Suppliers Cash Payments for Operating Expenses 1A 340000 60000 1090000 400000 Prepare the operating activities section of the statement of cash flows using the direct method. VAUGHN COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Receipts from Customers Cash Payments to Suppliers Cash Payments for Operating Expenses Net Cash Provided by Operating Activities 340000 60000 1090000 400000 1490000