Vaughn Company's income statement for the year ended December $31,2020,$ contained the following condensed information.

Service revenue

Operating expenses $($excluding depreciation$)$

Depreciation expense

Loss on sale of equipment

Income before income taxes

Income tax expense

Net income

$$837\mathrm{.}000$

$$621,000$

$60\mathrm{.}000$

$25,000$

$706,000$

$131,000$

$40,000$

$$91,000$

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

Accounts receivable

Accounts payable

Income taxes payable

$2020$

$$36,000$

$42,000$

$4\mathrm{.}000$

$2019$

$$55,000$

$31,000$

$8,200$

$($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$.(15,000).)$

VAUGHN COMPANY

Statement of Cash Flows $($Partial$)$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$.(15,000).)$

VAUGHN COMPANY

Statement of Cash Flows $($Partial$)$

For the Year Ended December $31,2020$

Cash Flows from Operating Activities

Adjustments to reconcile net income to

Increase in Income Taxes Payable

Decrease in Accounts Receivable

Increase in Accounts Payable

Decrease in Income Taxes Payable