Stellar Company?s income statement for the year ended December 31, 2017, contained the following condensed information.

Stellar?s balance sheet contained the following comparative data at December 31.

(Accounts payable pertains to operating expenses.) Prepare the operating activities section of the statement of cash flows using the direct method.

Service revenue Operating expenses (excluding depreciation) Depreciation expense Loss on sale of equipment Income before income taxes Income tax expense Net income $622,000 59,000 25,000 $848,000 706,000 142,000 40,000 $102,000 Accounts receivable Accounts payable Income taxes payable 2017 $38,000 41,000 3,800 2016 $53,000 31,000 8,500 STELLAR COMPANY Statement of Cash Flows (Partial) For the Year Ended December 31, 2017 Cash Flows from Operating Activities Cash Receipts from Customers Cash Payments for Income Taxes Cash Payments for Operating Expenses Net Cash Provided by Operating Activities X*** X*** X