The income statement of Vince Gill Company is shown below.

VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014
Sales revenue				$6,906,420
Cost of goods sold
Beginning inventory		$1,891,700
Purchases		4,354,370
Goods available for sale		6,246,070
Ending inventory		1,606,120
Cost of goods sold				4,639,950
Gross profit				2,266,470
Operating expenses
Selling expenses		458,980
Administrative expenses		696,770		1,155,750
Net income				$1,110,720

Additional information:

1.		Accounts receivable decreased $311,700 during the year.
2.		Prepaid expenses increased $171,810 during the year.
3.		Accounts payable to suppliers of merchandise decreased $273,770 during the year.
4.		Accrued expenses payable decreased $110,270 during the year.
5.		Administrative expenses include depreciation expense of $68,840.

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

VINCE GILL COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, 2014
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Cash Payments for Operating ExpensesIncrease in InventoryTaxes PaidCash Receipts from CustomersInterest PaidDecrease in Accounts ReceivableIncrease in Prepaid ExpensesIncrease in Accounts ReceivableDecrease in InventoryDecrease in Prepaid ExpensesDividends ReceivedCash Payments to Suppliers		$
Taxes PaidIncrease in Accounts ReceivableDecrease in InventoryDecrease in Accounts ReceivableIncrease in Prepaid ExpensesCash Receipts from CustomersInterest PaidDecrease in Prepaid ExpensesCash Payments to SuppliersIncrease in InventoryCash Payments for Operating ExpensesDividends Received	$
Cash Payments for Operating ExpensesIncrease in InventoryTaxes PaidCash Payments to SuppliersInterest PaidDecrease in InventoryDividends ReceivedIncrease in Accounts ReceivableCash Receipts from CustomersDecrease in Accounts ReceivableIncrease in Prepaid ExpensesDecrease in Prepaid Expenses
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash		$

Exercise 23-4 The income statement of Vince Gill Company is shown below