PREPARING A STATEMENT OF CASH FLOWS Erie Company reported the following comparative balance sheets for 2009:

2009 2008 Assets:

Cash $ 33,200 $ 12,000 Accounts receivable 53,000 45,000 Inventory 29,500 27,500 Prepaid rent 2,200 6,200 Long-term investments 17,600 31,800 Property, plant, and equipment 162,000 150,000 Accumulated depreciation (61,600) (56,200)

Total assets $235,900 $216,300 Liabilities and Equity:

Accounts payable $ 16,900 $ 18,000 Interest payable 3,500 4,800 Wages payable 9,600 7,100 Income taxes payable 5,500 3,600 Notes payable 28,000 53,000 Common stock 100,000 70,000 Retained earnings 72,400 59,800 Total liabilities and equity $235,900 $216,300 Additional information:

a. Net income for 2009 was $20,500.

b. Cash dividends of $7,900 were declared and paid during 2009.

c. Long-term investments with a cost of $35,000 were sold for cash at a gain of

$4,100. Additional long-term investments were purchased for $20,800 cash.

d. Equipment with a cost of $15,000 and accumulated depreciation of $13,500 was sold for $3,800 cash. New equipment was purchased for $27,000 cash.

e. Depreciation expense was $18,900.

f. A principal payment of $25,000 was made on long-term notes.

g. Common stock was sold for $30,000 cash.

Required:

Prepare a statement of cash flows for Erie, using the indirect method to compute net cash flow from operating activities.