(LO 2, 3) Krauss Company's income statement for the year ended December 31, 2017, contained the following condensed information.

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

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

	2017	2016
Accounts receivable	$37,000	$54,000
Accounts payable	41,000	31,000
Income taxes payable	4,000	8,500

(Accounts payable pertains to operating expenses.)

Instructions

Prepare the operating activities section of the statement of cash flows using the direct method.