Condensed financial data of McKillop Corporation appear below:

MCKILLOP CORPORATION

Comparative Statements of Financial Position

December 31

Assets

2022 2021

Cash............................................................................................... $74,700 $35,000

Accounts receivable...................................................................... 104,000 67,000

Inventory....................................................................................... 100,000 112,000

Prepaid expenses........................................................................... 32,000 36,000

Long-term investments.................................................................. 81,000 66,000

Property, plant, and equipment..................................................... 235,000 175,000

Accumulated depreciation............................................................. (65,000) (60,000)

Total....................................................................................... $561,700 $431,000

Liabilities and Shareholders' Equity

Accounts payable.......................................................................... $ 93,000 $75,000

Accrued expenses payable............................................................ 29,000 24,000

Bonds payable............................................................................... 135,000 160,000

Common shares............................................................................. 240,000 91,000

Retained earnings.......................................................................... 64,700 81,000

Total....................................................................................... $561,700 $431,000

MCKILLOP CORPORATION

Statement of Income

Year Ended December 31, 2022

Sales............................................................................................... $500,000

Expenses

Cost of goods sold..................................................................$295,000

Operating expenses................................................................ 65,000

Depreciation expense............................................................. 17,000

Interest expense...................................................................... 18,000

Loss on sale of equipment...................................................... 3,000 398,000

Income before income tax............................................................. 102,000

Income tax expense....................................................................... 15,300

Net income.................................................................................... $ 86,700

Additional information regarding fiscal 2022:

1. New equipment costing $85,000 was purchased for cash.

2. Old equipment costing $25,000 was sold for $10,000 cash when the carrying amount was $13,000.

3. Bonds were originally issued at face value. Bonds with a face value of $25,000 were converted into $25,000 of common shares during the year.

4. Cash dividends were declared and paid during the year.

5. Accounts payable pertain to merchandise purchases.

Instructions

Using the indirect method, prepare a statement of cash flows for the year ended December 31, 2022.