(Preparation of Operating Activities Section—Direct Method) Norman Company’s income statement for the year ended December 31, 2012, contained the following condensed information.
|
Service revenue |
$840,000 |
|
|
Operating expenses (excluding depreciation) |
$624,000 |
|
|
Depreciation expense |
60,000 |
|
|
Loss on sale of equipment |
26,000 |
710,000 |
|
Income before income taxes |
130,000 |
|
|
Income tax expense |
40,000 |
|
|
Net income |
$ 90,000 |
Norman’s balance sheet contained the following comparative data at December 31.
|
2012 |
2011 |
|
|
Accounts receivable |
$37,000 |
$59,000 |
|
Accounts payable |
46,000 |
31,000 |
|
Income taxes payable |
4,000 |
8,500 |
(Accounts payable pertains to operating expenses.)
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.