Problem - Thomton Company's income statement contained the condensed information below.
|
THORNTON COMPANY Income Statement For the Year Ended December 31, 2014
|
|
Service revenue
|
|
$3,273,750
|
|
Operating expenses, excluding depreciation
|
$2,072,250
|
|
|
Depreciation expense
|
185,625
|
|
|
Loss on disposal of plant assets
|
54,000
|
2,311,875
|
|
Income before income taxes
|
|
961,875
|
|
Income tax expense
|
|
189,000
|
|
Net income
|
|
$772,875
|
Thomton's balance sheet contained the comparative data at December 31.
|
|
2014
|
2013
|
|
Accounts receivable
|
$236,250
|
$202,500
|
|
Accounts payable
|
138,375
|
108,000
|
|
Income taxes payable
|
43,875
|
23,625
|
Accounts payable pertain to operating expenses.
Prepare the operating activities section of the statement of cash flows using the indirect method.