ETY Ltd. had the following income statement and balance sheet:

ETY Ltd.

Comparative Balance Sheet

December 31

2026 2025

Assets

Cash $35,800 $20,500

Accounts Receivable 94,700 90,500

Inventory 257,800 175,000

Equipment 277,600 250,000

Accumulated Depreciation, Equipment(152,400) (102,000)

----------- -----------

Total Assets $513,500 $434,000

======= =======

Liabilities and Shareholders Equity

Accounts Payable $113,900 $133,600

Common Shares 325,000 275,000

Retained Earnings 74,600 25,400

----------- -----------

Total Liabilities and Equity $513,500 $434,000

======= =======

ETY Ltd.

Income Statement

For the Year Ended December 31, 2026

Sales $667,000

Cost of Goods Sold 321,500

-----------

Gross Profit 345,500

Operating Expenses:

Depreciation Expense $60,400

Other Operating Expenses 152,100

-----------

Total Operating Expenses 212,500

------------

Operating Income 133,000

Loss on sale of Equipment (11,000)

------------

Profit 122,000

======

Other information regarding ETY Ltd. during the 2026 year:

a) Equipment costing $27,600 was sold for $6,600.

b) Equipment purchases were for cash.

c) Issued 5,000 common shares at $10 per share.

d) Declared and paid cash dividends.

Required:

Prepare a Statement of Cash Flows for the year ended December 31, 2026. Use the direct method.

SHOW YOUR SUPPORTING CALCULATIONS.