Data for Darbyshire Inc. are presented in P17-5B.

In P17-5B, The income statement of Darbyshire Inc. reported the following condensed information.

Darbyshire’s balance sheet contained these comparative data at December 31.

Darbyshire has no depreciable assets. Accounts payable pertain to operating expenses.

Instructions
Prepare the operating activities section of the statement of cash flows using the directmethod.

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DARBYSHIRE INC. Income Statement For the Year Ended December 31, 2014 Service revenue Operating expenses Income from operations Income tax Net income $545,000 400,000 145,000 36,000 $109,000 expense Accounts receivable Accounts payable Income taxes payable 2014 $50,000 30,000 10,000 2013 $70,000 51,000 4,000