Grania Company’s income statement contained the condensed information below.

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

Accounts payable pertain to operating expenses.

Instructions

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

GRANIA COMPANY Income Statement For the Year Ended December 31, 2010 $970,000 Revenues Operating expenses, excluding depreciation Depreciation expense Loss on sale of equipment $624,000 60,000 16,000 700,000 Income before income taxes 270,000 40,000 Income tax expense $230,000 Net income