. Mayflower 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 Mayflower for 2019 and 2018 are provided below.

BALANCE SHEETS

12/31/19 12/31/18

Cash $408,000 $ 192,000

Accounts receivable 360,000 216,000

Inventory 384,000 480,000

Property, plant and equipment $608,000 $960,000

Less accumulated depreciation (320,000) 288,000 (304,000) 656,000

$1,440,000 $1,544,000

Accounts payable $ 176,000 $ 96,000

Income taxes payable 352,000 392,000

Bonds payable 360,000 600,000

Common stock 216,000 216,000

Retained earnings 336,000 240,000

$1,440,000 $1,544,000

INCOME STATEMENT

For the Year Ended December 31, 2019

Sales revenue $8,400,000

Cost of sales 7,152,000

Gross profit 1,248,000

Selling expenses $600,000

Administrative expenses 192,000 792,000

Income from operations 456,000

Interest expense 72,000

Income before taxes 384,000

Income taxes 96,000

Net income $ 288,000

The following additional data were provided:

Dividends for the year 2019 were $192,000.

During the year, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.

All depreciation expense is in the selling expense category.

Questions relate to a statement of cash flows (indirect method) for the year ended December 31^st, 2019, for Harlan Mining Company.

3. How much is depreciation expense during the year?

4. Calculate cash from operating activities during the year using the indirect method.