E23-3 (Preparation of Operating Activities Section – Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below

E23-3 (Preparation of Operating Activities Section – Indirect Method, Periodic Inventory) The income statement of Rodriquez Company is shown below.

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 increase $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.

Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2012, for Rodriquez Company, using the indirect method.

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