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E23-4 Data for the Rodriquez Company

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E23-4 The income statement of Rodriquez Company is shown below.

E23-4 (Preparation of Operating Activities Section—Direct Method) Data for the Rodriquez Company

Income Statement
For the Year Ended December 31, 2012
Sales  6,900,000
Cost of goods sold
   Beginning inventory  1,900,000
   Purchases  4,400,000
   Goods available for sale  6,300,000
   Ending inventory  1,600,000
   Cost of goods sold  4,700,000
Gross profit  2,200,000
Operating expenses
   Selling expenses  450,000
   Administrative expenses  700,000  1,150,000
Net income  1,050,000

Additional information:
1. Accounts receivable decreased $310,000 during the year.
2. Prepaid expenses increased $170,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.
4. Accrued expenses payable decreased $120,000 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.

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