McTavish Ltd. completed its first year of operations on September 30, 2014. McTavish reported the following information at September 30, 2014:

McTAVISH LTD.

Selected balance sheet account balances at September 30, 2014

Accounts receivable............................................................$23,000

Prepaid expenses...................................................................3,100

Accrued expenses payable......................................................10,500

Interest payable.......................................................................500

Dividends payable.................................................................3,800

Income taxes payable.............................................................9,800

Instructions
Assuming that McTavish reports under ASPE, prepare the operating section of a cash flow statement using the direct method.

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McTAVISH LTD. Income Statement Year Ended September 30, 2014 $285,000 Service revenue Operating expenses Depreciation expense Gain on sale of equipment Profit from operations Interest expense Profit before income tax Income tax expense Profit $122,000 12,300 (5,750) 128,550 156,450 4,000 152,450 38,500 $113,950