Use the information concerning Ingersol Construction Supply Company provided in Alternate Problem 12-1 to fulfill the following requirements.

Data from in Problem 12-1

Ingersol Construction Supply 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 as follows:

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. Dividends of $15,000 were declared and paid in cash.
e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; and 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 using the direct method for the year ended December 31, current year.
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 Cost of goods sold Other expenses Net income Current Year $ 34,000 45,000 32,000 121,000 (30,000) $202,000 $36,000 2,200 40,000 86,600 37,200 $202,000 $135,000 (70,000) (37,800) $ 27,200 Prior Year $ 29,000 28,000 38,000 100,000 (25,000) $170,000 $ 27,000 1,400 46,000 70,600 25,000 $170,000