The income statement of Frank Company is shown below: FRANK COMPANY Income Statement For the Year Ended December 31, 2017 Sales $8,400,000 Cost of goods sold 5,400,000 Gross profit 3,000,000 Operating expenses Selling expenses $500,000 Administrative expense 700,000 Depreciation expense 90,000 Amortization expense 30,000 1,320,000 Net income $1,680,000 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.
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, for Frank Company, using the direct method.