Indirect method.

Additional information: 1.) Operating expenses are composed of: Depreciation $21,000; Salaries $134,000; Gain on Sale of Equipment $6,000; other operating expenses $39,000. 2.) Prepaid insurance is related to the other operating expenses. 3.) Equipment was purchased during the year for $32,000cash. 4.) Equipment was sold for cash during the year. The original cost of the equipment was $17,000, and the accumulated depreciation was $9,000. 5.) Dividends were declared and paid during the yar