The comparative balance sheets for Hinckley Corporation show the following information:
				December 31
				2012	2011
	Cash			$33,500	$13,000
	Accounts receivable			12,250	10,000
	Inventory			12,000	9,000
	Investments			0	3,000
	Building			0	29,750
	Equipment			45,000	20,000
	Patent			5,000	6,250
	Totals			$107,750	$91,000
	Allowance for doubtful accounts			$3,000	$4,500
	Accumulated depreciation on equipment			2,000	4,500
	Accumulated depreciation on building			0	6,000
	Accounts payable			5,000	3,000
	Dividends payable			0	5,000
	Notes payable, short-term (nontrade)			3,000	4,000
	Long-term notes payable			31,000	25,000
	Common stock			43,000	33,000
	Retained earnings			20,750	6,000
	Totals			$107,750	$91,000
Additional data related to 2012 are as follows:
1. Equipment that had cost		$11,000	and was	40%	depreciated at time of
disposal was sold for		$2,500
2.	$10,000	of the long-term note payable was paid by issuing common stock.
3. Cash dividends paid were		$5,000
4. On January 1, 2012, the building was completely destroyed by a flood. Insurance proceeds
on the building were		$30,000	(net of	$2,000	taxes).
5. Investments (available-for-sale) were sold at				$1,700	above their cost. The
company has made similar sales and investments in the past.
6. Cash of was paid for the acquisition of equipment.
7. A long-term note for		$16,000	was issued for the acquisition of equipment.
8. Interest of	$2,000	and income taxes of		$6,500	were paid in cash.
Instructions:
Prepare a statement of cash flows using the indirect method. Flood damage is unusual and infrequent in that part of the country.
HINCKLEY CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
Net income (a)						$14,750
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on sale of equipment (b)					$5,200
Gain from flood damage					Amount
Depreciation expense (c)					Amount
Patent amortization					Amount
Gain on sale of investments					(3,700)
Increase in accounts receivable (net)					Amount
Increase in inventory					(3,000)
Increase in accounts payable					Amount	Formula
Net cash provided by operating activities						Formula
Cash flows from investing activities
Sale of investments					$6,700
Sale of equipment					Amount
Purchase of equipment (d)					Amount
Proceeds from flood damage to building					Amount
Net cash provided by investing activities						Formula
Cash flows from financing activities
Payment of dividends					($5,000)
Payment of short-term note payable					Amount
Net cash used by financing activities						Formula
Increase in cash						Amount
Cash, January 1, 2012						Amount
Cash, December 31, 2012						Formula
	Supplemental disclosures of cash flow information:
	Cash paid during the year for:
	Interest				2,000
	Income taxes:				Amount
	Noncash investing and financing activities
	Retired note payable by issuing common stock				Amount
	Purchased equipment by issuing note payable				Amount
					Formula
	Supporting Computations:
	(a) Ending retained earnings				Amount
	Beginning retained earnings				Amount
	Net income				Formula
	(b) Cost				Amount
	Accumulated depreciation				Amount
	Book value				Formula
	Proceeds from sale				Amount
	Loss on sale				Formula
	(c) Accumulated depreciation on equipment sold				Amount
	Decrease in accumulated depreciation				Amount
	Depreciation expense				Formula
	(d) Beginning equipment balance				$20,000
	Cost of equipment sold				Amount
	Remaining balance				Formula
	Purchase of equipment with note				Amount
	Adjusted balance				Formula
	Ending equipment balance Purchased with cash formula				Amount