Co. wants you to prepare its statement of cash flows.

Financial statements of Co. for 20X5 and 20X4 are provided below.

BALANCE SHEETS

12/31/X5 12/31/X4

Cash $306,000 $ 144,000

Accounts receivable $270,000 $162,000

Inventory $288,000 $360,000

Property, plant and equipment $456,000 $720,000

Less accumulated depreciation (240,000) 216,000 (228,000) 492,000

$1,080,000 $1,158,000

Accounts payable $ 132,000 $ 72,000

Income taxes payable 264,000 294,000

Bonds payable 270,000 450,000

Common stock 162,000 162,000

Retained earnings 252,000 180,000

$1,080,000 $1,158,000

INCOME STATEMENT

For the Year Ended December 31, 20X5

Sales revenue $6,300,000

Cost of sales 5,364,000

Gross profit 936,000

Selling expenses $450,000

Administrative expenses 144,000 594,000

Income from operations 342,000

Interest expense 54,000

Income before taxes 288,000

Income taxes 72,000

Net income $ 216,000

The following additional data were provided:

1. Dividends for the year 20X5 were $144,000.

2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.

3.All depreciation expense is in the selling expense category.

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Prepare the Statement of Cash Flows for the period ending December 31, 20X5