The Extra Surplus Company's Balance Sheet for December 31, 2017 and the Income Statement for 2018 are shown below.

Extra Surplus Company
Balance Sheet
December 31, 2017
Assets
Cash	$	16,000
Accounts Receivable		8,000
Inventory		19,200
Property and Equipment, Net		32,000
	$	75,200
Liabilities and Stockholders Equity
Accounts Payable	$	16,000
Notes Payable, Long-Term		8,000
Common Stock		32,000
Retained Earnings		19,200
	$	75,200

Extra Surplus Company
Income Statement
For the Year Ended December 31, 2018
Sales	$	28,600
Cost of Goods Sold		6,600
Salaries and Wage Expense		6,600
Interest Expense		2,200
Other Expenses		1,100
Net Income	$	12,100

Additional data:

• Sales were $28,600; $17,600 in cash was received from customers.
• Bought new land for cash, $22,000.
• Sold other land for its book value of $11,000.
• Paid $2,200 principal on the long-term note payable and $2,200 in interest.
• Issued new shares of stock for $22,000 cash.
• Cash dividends of $3,400 were declared and paid to stockholders.
• Paid $12,700 on accounts payable.
• No inventory purchases were made; other expenses were incurred on account.
• All wages were paid in cash.
• Other expenses were on account.

Required:

1. Prepare a balance sheet at December 31, 2018.
2. Prepare the statement of cash flows using the direct method.