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Your answer is partially correct. The income statement of Buffalo Company is shown below. BUFFALO COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $7,380,000 Cost of goods sold Beginning inventory $1,890,000 Purchases 4,080,000 Goods available for sale 5,970,000 Ending inventory 1,650,000 Cost of goods sold 4,320,000 Gross profit 3,060,000 Operating expenses Selling expenses 440,000 Administrative expenses 650,000 1,090,000 Net income $1,970,000 Additional information: 1. 2. 3. 4. 5. Accounts receivable decreased $310,000 during the year. Prepaid expenses increased $180,000 during the year. Accounts payable to suppliers of merchandise decreased $280,000 during the year. Accrued expenses payable decreased $140,000 during the year. Administrative expenses include depreciation expense of $70,000. Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, for Buffalo Company, using the indirect method. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) BUFFALO COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ 7690000 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation expense $ 4360000 Decrease in Accounts Receivable Increase in Prepaid Expenses Decrease in Accounts Payable Decrease in Accrued Expenses Payable > Decrease in Inventory Cash Flows from Operating Activities $