A comparative balance sheet for Lomax Company containing data for the last two years is as follows:

Lomax Company Comparative Balance Sheet This Last Year Year Assets Current assets: Cash and cash equivalents $ 88,000 $ 63,600 Accounts receivable 624,000 652,500 Inventory 628,400 437,000 Prepaid expenses 23,600 13,500 Total current assets 1,364,000 1,166,600 2,455,000 1,868,000 Property, plant, and equipment Less accumulated depreciation 635,400 575,300 1,292,700 Net property, plant, and equipment 1,819,600 Long-term investments 115,700 181,000 Loans to subsidiaries 137,000 78,500 Total assets $3,436,300$ 2,718,800 Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities Income taxes payable $ 897,200 $ 587,000 35,200 57,300 155,100 131,600 1,087,500 Total current liabilities 775.900 Bonds payable 705,000 451,000 1,792,500 1,226,900 Total liabilities Stockholders' equity: Common stock Retained earnings 1,124,000 1,017,000 519,800 474,900 1,643,800 1,491,900 Total stockholders' equity Total liabilities and stockholders' equity $3,436,300g 2,718,800 The following additional information is available about the company's activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $397,000 were repaid during this year. c. Equipment was sold during this year for $78,500. The equipment had cost $164,000 and had $60,400 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $144,000. These investments had cost $65,300 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Lomax did not repurchase any of its own stock during the year. The company reported net income this year as follows: Sales Cost of goods sold $3,340,000 2,070,800 1,269,200 Gross margin Selling and administrative expenses 1,020,100 249,100 Net operating income Nonoperating items: Gain on sale of investments Loss on sale of equipment $78,700 25,100 53,600 302,700 Income before taxes Income taxes 97,000 Net income $ 205,700 Required: 1. Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.) $ 205,700 Lomax Company Statement of Cash Flows Operating activities: Net income Adjustments to convert net income to cash basis: Depreciation Gain on sale of investments Loss on sale of equipment 0 205,700 Investing activities: 0 Financing activities: Investing activities: Financing activities: 0 205,700 Beginning cash and cash equivalents Ending cash and cash equivalents $ 205,700