The income statement of Rodriquez Company is shown below.
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RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012
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Sales
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$6,894,600
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Cost of goods sold
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Beginning inventory
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$1,893,870
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Purchases
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4,375,530
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Goods available for sale
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6,269,400
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Ending inventory
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1,608,650
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Cost of goods sold
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4,660,750
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Gross profit
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2,233,850
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Operating expenses
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Selling expenses
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440,640
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Administrative expenses
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703,840
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1,144,480
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Net income
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$1,089,370
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Additional information:
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1.
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Accounts receivable decreased $312,690 during the year.
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2.
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Prepaid expenses increased $178,550 during the year.
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3.
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Accounts payable to suppliers of merchandise decreased $281,970 during the year.
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4.
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Accrued expenses payable decreased $124,510 during the year.
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5.
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Administrative expenses include depreciation expense of $55,760.
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Prepare the operating activities section of the statement of cash flows using the direct method.