Create a statement of cashflows using the direct method and show all work.

Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2015 and 2014 are provided below. BALANCE SHEETS Cash Accounts receivable Inventory Property, plant and equipment Less accumulated depreciation 12/31/15 $306,000 270,000 288,000 $456,000 (240,000) 216,000 $1.080.000 12/31/14 $ 144,000 162,000 360,000 $720,000 (228,000) 492,000 $1.158.000 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings $ 132,000 264,000 270,000 162,000 252,000 $1.080,000 $ 72,000 294,000 450,000 162,000 180,000 $1,158,000 INCOME STATEMENT For the Year Ended December 31, 2015 $6,300,000 5,364,000 936,000 $450,000 144,000 Sales revenue Cost of sales Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before taxes Income taxes Net income 594,000 342,000 54,000 288,000 72,000 $ 216.000 The following additional data were provided: 1. Dividends for the year 2015 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