Sawada Trades, Inc.€™s income statement and comparative balance sheets appear as follows:

Additional information related to business activities during 2014:
1. All accounts payable pertain to inventory purchases, and accrued liabilities pertain to other operating expenses.
2. The original cost of the equipment sold was $43,000. New equipment was purchased and 5,000 common shares at $5 per share were issued as a partial payment.
3. Sawada declared and paid a dividend on December 30.
Requirements
1. Identify source and use of cash for each account in the Balance Sheet.
2. Calculate the cash receipt from the sale of equipment and the cost of the new equipment, using T-accounts to show your calculations.
3. Prepare a cash flow statement, using the indirect method.
4. Prepare the cash flow from operating activities section by using the direct method.

O'Malley Corporation December 31 Current Assets Cash and Cash Equivalents Accounts Receivable... Inventory80,000 83,000 Current Liabilities: Accounts Payable.. .. Income Tax Payable.. 2014 2013 ..$85,000 $22,000 69,200 64,200 $57,800 $55,800 14,700 16,700 Transaction Data for 2014: Net Income. Purchase of treasury shares.14,000 . S 57,000 41,000 Loss on sale of equipment.11,000 Payment of cash dividends Depreciation Expense Issuance of long-term note payable in exchange for cash Purchase of building for cash..125,000 Retirement of bonds payable by issuing common shares65,000 Sale of equipment for cash..58,000 18,000 21,000 34,000