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Pearl Companys income statement for the year ended December 31, 2017, contained the following condensed...

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Accounting

Pearl Companys income statement for the year ended December 31, 2017, contained the following condensed information.

Service revenue

$841,000
Operating expenses (excluding depreciation)

$624,000
Depreciation expense

59,000
Loss on sale of equipment

25,000

708,000
Income before income taxes

133,000
Income tax expense

40,000
Net income

$93,000

Pearls balance sheet contained the following comparative data at December 31.

2017

2016
Accounts receivable $35,000 $53,000
Accounts payable 41,000 31,000
Income taxes payable 3,800 8,000

(Accounts payable pertains to operating expenses.) Prepare the operating activities section of the statement of cash flows using the direct method.

image

PEARL COMPANY Statement of Cash Flows (Partial)

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