Portions of the financial statements for Horizon Telecom are provided below.
HORIZON TELECOM
Income Statement
For the Year Ended December 31, 2018 |
| Revenues |
|
$612,000 |
| Expenses: |
|
|
| Cost of goods sold |
$365,000 |
|
| Operating expenses |
118,000 |
|
| Depreciation expense |
30,000 |
|
| Income tax expense |
49,500 |
|
| |
|
|
| Total expenses |
|
562,500 |
| |
|
|
| Net Income |
|
$ 49,500 |
HORIZON TELECOM
Selected Balance Sheet Data
December 31, 2018 |
| Increase in accounts receivable |
$ 5,800 |
| Increase in inventory |
11,400 |
| Decrease in prepaid rent |
9,000 |
| Increase in operating expenses payable |
6,500 |
| Decrease in accounts payable |
7,300 |
| Increase in income tax payable |
21,300 |
|
|
Prepare the operating activities section of the statement of cash flows for Horizon Telecom using the indirect method.