Question Details

Prepare the operating activities section of the statement 



1
The income statement of Falcone Company is shown below:
FALCONE COMPANY
Income Statement
For the Year Ended December 31, 2011

Sales		$8,000,000
Cost of goods sold		  5,400,000
Gross profit		2,600,000
Operating expenses
	Selling expenses	$500,000
	Administrative expenses	700,000
	Depreciation expense	90,000
	Amortization expense	    30,000	  1,320,000
Net income		$1,280,000

Additional information:
1.	Accounts receivable increased $400,000 during the year.
2.	Inventory increased $250,000 during the year.
3.	Prepaid expenses increased $200,000 during the year.
4.	Accounts payable to merchandise suppliers increased $100,000 during the year.
5.	Accrued expenses payable increased $160,000 during the year.

Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2011, for Falcone Company, using the direct method.




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