Ellis Corp.€™s income statement for the year ended December 31, 2011, had the following condensed information:

There were no purchases or sales of temporary investments during 2011. Ellis€™s balance sheet included the following comparative data at December 31:

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

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Revenue from fees Operating expenses (excluding depreciation) Depreciation expense Holding loss on temporary investments (FV-NI) Loss on sale of equipment Income before income taxes Income tax expense Net income $778,000 $499,000 66,000 4,000 14,000 583,000 195,000 61,000 $134,000 2011 $22,000 35,000 44,000 6,000 2010 $26,000 54,000 31,000 8,500 Temporary investments (FV-NI) Accounts receivable Accounts payable Income taxes payable