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Teal Companys income statement for the year ended December 31, 2017, contained the following condensed information. Service revenue $845,000 Operating expenses (excluding depreciation) $620,000 Depreciation

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

Service revenue

$845,000

Operating expenses (excluding depreciation)

$620,000

Depreciation expense

61,000

Loss on sale of equipment

26,000

707,000

Income before income taxes

138,000

Income tax expense

41,000

Net income

$97,000

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

2017

2016

Accounts receivable $39,000 $56,000
Accounts payable 39,000 33,000
Income taxes payable 4,100 8,400

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

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