Joe Pesci Company reported net income of \(\$ 195,000\) for 1998. Pesci also reported depreciation expense of \(\$ 35,000\) and a loss of \(\$ 5,000\) on the sale of equipment. The comparative balance sheet shows an increase in accounts receivable of \(\$ 15,000\) for the year, an \(\$ 8,000\) increase in accounts payable, and a \(\$ 4,000\) decrease in prepaid expenses.

\section*{Instructions}

Prepare the operating activities section of the statement of cash flows for 1998. Use the indirect method.