E23-5 (Preparation of Operating Activities Section-Direct Method) Krauss Company's income state- ment for the year ended December 31, 2014, contained the following condensed information. $840,000 Service revenue Operating expenses (excluding depreciation) $624,000 Depreciation expense 60,000 Loss on sale of equipment 26,000 Income before income taxes Income tax expense Net income 710,000 130,000 40,000 $90,000 Krauss's balance sheet contained the following comparative data at December 31. 2013 $54,000 31,000 8,500 Accounts receivable Accounts payable Income taxes payable (Accounts payable pertains to operating expenses.) 2014 $37,000 41,000 4,000 Instructions Prepare the operating activities section of the statement of cash flows using the indirect method.
E23-5 (Preparation of Operating Activities Section-Direct Method) Krauss Company's income state- ment for the year ended December 31, 2014, contained the following condensed information. $840,000 Service revenue Operating expenses (excluding depreciation) $624,000 Depreciation expense 60,000 Loss on sale of equipment 26,000 Income before income taxes Income tax expense Net income 710,000 130,000 40,000 $90,000 Krauss's balance sheet contained the following comparative data at December 31. 2013 $54,000 31,000 8,500 Accounts receivable Accounts payable Income taxes payable (Accounts payable pertains to operating expenses.) 2014 $37,000 41,000 4,000 Instructions Prepare the operating activities section of the statement of cash flows using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:E23-5 (Preparation of Operating Activities Section-Direct Method) Krauss Company's income state-
ment for the year ended December 31, 2014, contained the following condensed information.
$840,000
Service revenue
Operating expenses (excluding depreciation)
Depreciation expense
Loss on sale of equipment
Income before income taxes
Income tax expense
Net income
$624,000
60,000
26,000
710,000
130,000
40,000
$ 90,000
Krauss's balance sheet contained the following comparative data at December 31.
2013
$54,000
31,000
8,500
Accounts receivable
Accounts payable
Income taxes payable
(Accounts payable pertains to operating expenses.)
2014
$37,000
41,000
4,000
Instructions
Prepare the operating activities section of the statement of cash flows using the indirect method.
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