McTavish Ltd. completed its first year of operations on September 30, 2017. McTavish reported the following information at September 30, 2017:
McTAVISH LTD.
Selected balance sheet account balances at September 30, 2017
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, 2017 Service revenue Operating expenses Depreciation expense Gain on sale of equipment Profit from operations Interest expense Profit before income tax Income tax expense Profit $285,000 $122,000 12,300 (5,750) 128,550 156,450 4,000 152,450 38,500 $113,950