Golden Deer Company 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 below:

Additional Data:
a. Bought equipment for cash, $40,000. Sold equipment with original cost of $14,000, accumulated depreciation of $10,000, for $6,000 cash.
b. Paid $8,000 on the long-term note payable.
c. Issued new shares of stock for $9,000 cash.
d. No dividends were declared or paid.
e. Other expenses included depreciation, $22,000; wages, $16,300; taxes, $5,000; and other, $5,700.
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. Evaluate the statement of cash flows.

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Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Gain on sale of equipment Cost of goods sold Other expenses Net income Current Year $ 57,000 37,000 63,000 65,000 (38,000) $184,000 $ 42,000 3,000 22,000 67,000 50,000 $184,000 $165,000 2,000 (102,000) (49,000) $ 16,000 Prior Year $ 61,000 41,000 57,000 39,000 (26,000) $172,000 $ 38,000 12,000 30,000 58,000 34,000 $172,000 Ac