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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.
PEARL COMPANY Statement of Cash Flows (Partial)
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