A Retzlaff Company’s income statement contained the condensed information below.

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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Revenues RETZLAFF COMPANY Income Statement For the Year Ended December 31, 2012 Operating expenses, excluding depreciation Depreciation expense $970,000 $614,000 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