Additional data (ignoring taxes):

1. Sales revenue for the year was $2,160,000, COGS was $1,520,000, operating expense was $481,800 (includes depreciation and bad debt expense), net income was $170,000.
2. Bad debt expense for the year was $21,600.
3. The cash dividend declared in 2019 was fully paid in 2019.
4. A 20% share dividend was declared during the year.
5. Equity investments that cost $100,000 were sold during the year for $115,000.
6. Machinery that cost $15,000, on which $3,000 of depreciation had accumulated, was sold for $8,800.

Required:

Prepare statement of cash flows using direct method and explain the result!

Comparative statement of financial position accounts of Tea Co. presented below: Tea Co. Comparative Statement of Financial Position AccountsAs of December 31, 2019 and 2018 Dec 31, 2019 Dec 31, 2018 Debit Cash 168,000 135,000 Accounts Receivable 282,000 240,000 Inventory 120,000 96,000 Equity Investment (non-trading) 89,000 154,000 Machinery 120,000 75,000 Buildings 270,000 225,000 Land 30,000 30,000 1,079,000 955,000 Credit Allowance for Doubtful Accounts 9,000 6,000 Accm. Depreciation - Machinery 22,500 9,000 Accm. Depreciation - Buildings 54,000 36,000 Accounts Payable 140,000 99,000 Accrued Payable 13,500 10,500 Long-Term Notes Payable 84,000 124,000 Share Capital - Ordinary, no par 600,000 500,000 Retained Earnings 156,000 170,500 1,079,000 955,000