Burrow Mining Inc.'s comparative balance sheet information at December 31, 2017, and 2016, and its income statement for the year ended December 31, 2017, are as follows:

During 2017, the following transactions occurred:

1. Issued $14,000 of bonds payable at face value.
2. Sold the non-current investment on January 1, 2017, for $16,800, resulting in investment income of $6,720.
3. Sold equipment for $3,920 cash that had originally cost $17,920 and had $11,760 of accumulated depreciation.
4. Purchased equipment for $11,200 cash.

Required:

Prepare a statement of cash flows for 2017 using the direct method to report cash inflows and outflows from operating activities.

Other information:

1. All sales are credit sales.
2. All credits to accounts receivable are receipts from customers.
3. All purchases of merchandise are on credit.
4. All debits to accounts payable result from payments for merchandise.
5. Other operating expenses are cash expenses.
6. Income taxes are cash expenses.

... Burrow Mining Inc. Income Statement Year Ended December 31, 2017 Sales ......... 504,000 Cost of goods sold 336,000 Gross profit..... 168,000 Operating expenses....... 77,920 Depreciation expense.. 24,080 102,000 Profit from Operations ......... 66,000 Loss on sale of equipment....... 2,240 Investment income 6,720 Profit before Taxes................... 70,480 Income taxes.......... 10,000 Profit ........... 60,480 Burrow Mining Inc. Comparative Balance Sheet Information December 31 Net 2017 2016 Change Cash....... $ 28,000 $ 14,560 $ 13,440 Cash equivalents 10,080 5,600 4,480 Accounts receivable....... 51,520 21,840 29,680 Inventory............ 66,640 48,720 17,920 Non-current investment ...... O 10,080 (10,080) Land............. 44,800 44,800 -0 Building and equipment...... 259,280 266,000 (6,720) Accumulated depreciation ... 68,880 56,560 12,320 Accounts payable..... 11,920 21,600 (9,680) Dividends payable 400 800 (400) Bonds payable ........ 14,000 -O 14,000 Preferred shares...... 47,600 47,600 Common shares .......... 236,880 236,880 -0 Retained earnings........... 80,640 48,160 32,480