Reference no: EM132460477

The statement of income of Sheffield Transport Inc. for the year ended December 31, 2020, reported the following condensed information:

Service revenue		$565,000
Operating expenses		390,000
Income from operations		175,000
Other revenues and expenses
Gain on disposal of equipment	$35,000
Interest expense	20,000	15,000
Income before income tax		190,000
Income tax		38,000
Net Income		$152,000

Sheffield's statement of financial position included the following comparative data at December 31:

	2020	2019
Accounts receivable	$66,500	$79,000
Prepaid insurance	20,000	6,000
Accounts payable	44,500	72,500
Interest payable	7,000	2,250
Income tax payable	19,000	18,000
Unearned revenue	38,000	50,000

Operating expenses include $180,000 in depreciation expense. The company follows !FRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows.

Question 1: Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, using the indirect method. (Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g. (15,000).)