E11.2 Prepare the operating activities section — indirect method. LO3 Madonna Ltd reported profit of $200 000 for 2018. Madonna Ltd also reported depreciation expense of $35 000 and a loss of $5000 on the sale of equipment. The statement of financial position shows an increase in accounts receivable of $15 000 for the year, an $8000 increase in accounts payable, and a $5000 increase in prepaid expenses.

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