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P13-6A Rattigan Direct method

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Rattigan Company’s income statement contained the condensed information below.
Rattigan Company
Income Statement
For the Year Ended December 31, 2014

Sales revenue   970,000
Operating expenses, excluding depreciation   624,000
Depreciation expense   55,000
Loss on disposal of plant assets   25,000  704,000
Income before income taxes   266,000
Income tax expense   40,000
Net income   226,000

Rattigan’s balance sheet contained the comparative data at December 31, shown below.

2014 2013
Accounts receivable   75,000  60,000
Accounts payable   41,000  27,000
Income taxes payable   13,000  7,000

Accounts payable pertain to operating expenses.

Prepare the operating activities section of the statement of cash flows using the direct method

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