Exercise 23-6

Sheffield Companys income statement for the year ended December 31, 2017, contained the following condensed information.

Service revenue				$834,000
Operating expenses (excluding depreciation)		$621,000
Depreciation expense		60,000
Loss on sale of equipment		26,000		707,000
Income before income taxes				127,000
Income tax expense				41,000
Net income				$86,000

Sheffields balance sheet contained the following comparative data at December 31.

		2017		2016
Accounts receivable		$39,000		$56,000
Accounts payable		40,000		30,000
Income taxes payable		4,200		8,700

(Accounts payable pertains to operating expenses.) Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

SHEFFIELD COMPANY Statement of Cash Flows (Partial) December 31, 2017For the Year Ended December 31, 2017For the Quarter Ended December 31, 2017
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Increase in Income Taxes PayableLoss on Sale of EquipmentDecrease in Income Taxes PayableNet IncomeDecrease in Accounts ReceivableGain on Sale of EquipmentDepreciation expenseDecrease in Accounts PayableIncrease in Accounts ReceivableIncrease in Accounts Payable		$
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
Decrease in Income Taxes Payable Increase in Accounts Receivable Gain on Sale of Equipment Increase in Income Taxes Payable Decrease in Accounts Receivable Loss on Sale of Equipment Net Income Depreciation expense Increase in Accounts Payable Decrease in Accounts Payable	$
Decrease in Accounts Receivable Increase in Accounts Receivable Depreciation expense Increase in Accounts Payable Decrease in Accounts Payable Increase in Income Taxes Payable Net Income Loss on Sale of Equipment Gain on Sale of Equipment Decrease in Income Taxes Payable
Decrease in Accounts Payable Decrease in Income Taxes Payable Gain on Sale of Equipment Increase in Accounts Receivable Increase in Income Taxes Payable Net Income Depreciation expense Decrease in Accounts Receivable Loss on Sale of Equipment Increase in Accounts Payable
Increase in Accounts Payable Decrease in Accounts Payable Increase in Income Taxes Payable Decrease in Accounts Receivable Increase in Accounts Receivable Gain on Sale of Equipment Decrease in Income Taxes Payable Loss on Sale of Equipment Net Income Depreciation expense
Loss on Sale of Equipment Gain on Sale of Equipment Increase in Accounts Receivable Decrease in Accounts Receivable Increase in Income Taxes Payable Decrease in Income Taxes Payable Net Income Depreciation expense Decrease in Accounts Payable Increase in Accounts Payable
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash Used by Financing ActivitiesNet Cash Used by Investing ActivitiesNet Cash Used by Operating ActivitiesNet Decrease in CashNet Increase in Cash		$