Question: The income statement of Dreamworks International Co. for the year ended December 31, 2002, reported the following condensed information.
Revenue from fees $470,000
Operating expenses 280,000
Income from operations 190,000
Income tax expense 47,000
Net income $143,000
Dreamworks’ balance sheet contained the following comparative data at December 31.
2002 2001
Account receivable $55,000 $40,000
Accounts payable 32,000 41,000
Income taxes payable 6,000 4,000
Dreamworks has no depreciable assets. (Accounts payable pertains to operating expenses.)
Instructions:
Prepare the operating activities section of the statement of cash flows using the direct method.