Use the following information for VPI Co. to prepare a statement of cash flows for the year ended December 31 using the indirect method.

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Cash balance at prior year-end... Increase in inventory.... $40,000 Gain on sale of machinery.... $ 2,000 5,000 Cash received from sale of machinery. 9,500 Depreciation expense .... 4,000 Increase in accounts payable... 1,500 Net income.... Decrease in accounts receivable.. Cash received from issuing stock 8,000 23,000 Cash paid for dividends..... 1,000 3,000