Retzlaff Company’s income statement contained the condensed information below.
RETZLAFF COMPANY
Income Statement
For the Year Ended December 31, 2012
Revenues $970,000
Operating expenses, excluding depreciation $614,000
Depreciation expense 55,000
Loss on sale of equipment 16,000 685,000
Income before income taxes 285,000
Income tax expense 56,000
Net income $229,000
Retzlaff’s balance sheet contained the comparative data at December 31.
2012 2011
Accounts receivable $70,000 $60,000
Accounts payable 41,000 32,000
Income taxes payable 13,000 7,000
Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the indirect
method.
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