An income statement and comparative balance sheets for Dexter Company follow.

Additional Information 1. Land was acquired during the year for $70,000.
2. An unimproved parcel of land was sold during the year for $27,500. Its original cost to Dexter was $30,000.
3. A specialized piece of equipment was acquired in exchange for capital stock in the company.
The value of the capital stock was $60,000.
4. In addition to the capital stock issued in (3), stock was sold for $40,000.
5. Dividends of $600 were paid.
Required Prepare a statement of cash flows for 2008 using the direct method in the Operating Activities section of the statement. Include supplemental schedules to report any noncash investing and financing activities and to reconcile net income to net cash provided by operating activities.

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Dexter Company Income Statement For the Year Ended December 31, 2008 Sales revenue $89,000 Cost of goods sold 57,000 Gross profit $32,000 Depreciation expense $ 6,500 Advertising expense 3,200 Salaries expense 12,000 Total operating expenses $21,700 Operating income $10,300 Loss on sale of land 2,500 Income before tax $ 7,800 Income tax expense Net income 2,600 $ 5,200 Dexter Company Comparative Balance Sheets December 31 2008 2007 Cash Accounts receivable Inventory $ 12,000 $ 9,500 22,000 18,400 25,400 20,500 Prepaid advertising 10,000 8,600 Total current assets $ 69,400 $ 57,000 Land Equipment $120,000 $ 80,000 190,000 130,000 Accumulated Total long-term assets Total assets Accounts payable Salaries payable Income taxes payable depreciation (70,000) (63,500) $240,000 $146,500 $309,400 $203,500 $ 15,300 $ 12,100 14,000 1,200 16,400 700 Total current liabilities $ 30,500 $ 29,200 Capital stock $200,000 $100,000 Retained earnings 78,900 74,300 Total stockholders' equity $278,900 $174,300 Total liabilities and stockholders' equity $309,400 $203,500