The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form:

Prepare a statement of cash flow, using the direct method of reporting cash flows from operating activities.

Cash	Year 2 $ 53,000	Year 1 $ 50,000
Accounts receivable (net)	37,000	48,000
Inventories	108,500	100,000
Investments		70,000
Equipment	573,200	450,000
Accumulated depreciationequipment	(142,000)	(176,000)
	$629,700	$542,000
Accounts payable	$ 62,500	$ 43,800
Bonds payable, due Year 2		100,000
Common stock, $10 par	325,000	285,000
Paidin capital in excess of parcommon stock	80,000	55,000
Retained earnings	162,200	58,200
	$629,700	$542,000
The income statement for the current year is as follows:
Sales		$625,700
Cost of merchandise sold		340,000
Gross profit Operating expenses: Depreciation expense	$ 26,000	$285,700
Other operating expenses	68,000	94,000
Income from operations Other income: Gain on sale of investment	$ 4,000	$191,700
Other expense: Interest expense	6,000	(2,000)
Income before income tax		$189,700
Income tax		60,700
Net income		$129,000

Additional data for the current year are as follows:

1. Fully depreciated equipment costing $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200.
2. Bonds payable for $100,000 were retired by payment at their face amount.
3. 5,000 shares of common stock were issued at $13 for cash.
4. Cash dividends declared and paid, $25,000.

Prepare a statement of cash flow, using the direct method of reporting cash flows from operating activities.