$7.$ Prepare a statement of cash flows using the indirect method.

Income statement

Sales $297,000$

Cost of goods sold $175,500$

Gross margin $121,500$

Operating expenses $58,500$

Net income $63,000$

Statement of financial position

$20$X$120$X$2$

Assets

Cash $49,50081,000$

Accounts receivable net $135,000108,000$

Inventory $27,00054,000$

Plant and equipment $180,000180,000$

Accumulated depreciation $(36,000)(45,000)$

Total Assets $355,500378,000$

Liabilities and equity

Accounts payable $57,60018,000$

Common stock $190,800207,000$

Retained earnings $107,100153,000$

Total liabilities and equity $355,500378,000$