Prepare the operating activities section of the statement

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Question - The income statement of Stellar Company is shown below.

Sales revenue


$6,630,000

Cost of goods sold



   Beginning inventory

$1,840,000


   Purchases

4,520,000


   Goods available for sale

6,360,000


   Ending inventory

1,530,000


   Cost of goods sold


4,830,000

Gross profit


1,800,000

Operating expenses



   Selling expenses

450,000


   Administrative expenses

660,000

1,110,000

Net income


$690,000

Additional information:

1. Accounts receivable decreased $290,000 during the year.

2. Prepaid expenses increased $180,000 during the year.

3. Accounts payable to suppliers of merchandise decreased $260,000 during the year.

4. Accrued expenses payable decreased $120,000 during the year.

5. Administrative expenses include depreciation expense of $60,000.

Required - Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, for Stellar Company, using the indirect method.

Reference no: EM133123486

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