BGP Electrical Supply is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

Additional Data:
a. Bought equipment for cash, $21,000.
b. Paid $6,000 on the long-term note payable.
c. Issued new shares of stock for $16,000 cash.
d. No dividends were declared or paid.
e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; other, $6,800.
f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:
1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.
2. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash during the current year.

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Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Accrued wages expense Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Cost of goods sold Other expenses Net income Current Year $ 37,000 32,000 41,000 132,000 (41,000) $201,000 $ 36,000 1,200 38,000 88,600 37,200 $201,000 $120,000 (70,000) (37,800) $ 12,200 Prior Year $ 29,000 28,000 38,000 111,000 (36,000) $170,000 $ 27,000 1,400 44,000 72,600 25,000 $170,000