Booth Manufacturing has provided the following financial statements. Other information includes:
a. Equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000).
b. Dividends of $225,000 were declared and paid.

Booth Manufacturing
Income Statement
For the Year Ended December 31, 2010
Revenues ..........$1,200,000
Gain on sale of equipment .....50,000
Less: Cost of goods sold .......(640,000)
Less: Depreciation expense ......(125,000)
Less: Interest expense .......(35,000)
Net income ...........$ 450,000

Required:
1. Calculate the cash flows from operations by using the indirect method.
2. Prepare a statement of cashflows.

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Booth Manufacturing Comparative Balance Sheets December 31, 2009 and 2010 2010 Assets $ 112,500 350,000 125,000 1,000,000 (500,000) 500,000 $1,587,500 S 350,000 281 250 150,000 1,025,000 (525,000) 718,750 $2,000,000 Accounts receivable Plant and equipment Accumulated depreciation Land Total assets Liabilities and equity Accounts payable Mortgage payable Common stock Contributed capital in excess of par Retained earnings S 300,000 75,000 300,000 912,500 $1,587,500 $ 237,500 250,000 75,000 300,000 1,137,500 $2,000,000 Total liabilities and equity