The income statement of Rosenthal Company is presented below.

Additional information:

1. Accounts receivable decreased $320,000 during the year, and inventory increased $120,000.

2. Prepaid expenses increased $175,000 during the year.

3. Accounts payable to merchandise suppliers increased $50,000 during the year.

4. Accrued expenses payable increased $155,000 during the year.

InstructionsPrepare the operating activities section of the statement of cash flows for the year ended December 31, 2010, for Rosenthal Company, using the indirect method.

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ROSENTHAL COMPANY Income Statement For the Year Ended December 31, 2010 $5,400,000 Sales Cost of goods sold Beginning inventory Purchases $1,780,000 3,430,000 Goods available for sale 5,210,000 Ending inventory 1,900,000 Total cost of goods sold 3,310,000 Gross profit Operating expenses Depreciation expense Amortization expense Other expenses 2,090,000 105,000 20,000 945,000 1,070,000 $1,020,000 Net income