Vail Company's income statement for the year ended December 31, 1996, contained the following condensed information:

Vail's balance sheet contained the following comparative data at December 31:

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

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Revenue from fees $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