(Preparation of Operating Activities Section—Direct Method) Krauss Company’s income statement for the year ended December 31, 2007, contained the following condensed information.

Krauss’s balance sheet contained the following comparative data at December 31.

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

Transcribed Image Text:

Revenue from fees Operating expenses (excluding depreciation) Depreciation expense Loss on sale of equipment Income before income taxes Income tax expense Net income $840,000 $624,000 60,000 26,000 710,000 130,000 40,000 $ 90,000