The financial statements of Lewis Limited appear below:

LEWIS LIMITED

Comparative Statement of financial positions

31 December 2017

2017 2016

Assets

Cash $ 44,000 $ 23,000

Accounts receivable 26,000 34,000

Inventory 20,000 15,000

Property, plant, and equipment 50,000 78,000

Accumulated depreciation (20,000) (24,000)

Total $120,000 $126,000

Liabilities and Equity

Accounts payable $ 15,000 $ 23,000

Income taxes payable 13,000 8,000

Share Capital 48,000 48,000

Retained earnings 44,000 47,000

Total $120,000 $126,000

LEWIS LIMITED

Income Statement

for the year ended 31 December 2017

Sales $350,000

Cost of sales 280,000

Gross profit 70,000

Selling expenses $20,000

Administrative expenses 16,000

Interest expense 4,000

Income before income taxes 30,000

Income tax expense 10,000

Profit after income tax $ 20,000

The following additional data were provided:

1. A cash dividend was declared and paid during the year.

2. During the year an equipment was sold for $12,000 cash. This equipment cost $28,000 originally and had a carrying amount of $12,000 at the time of sale.

3. All depreciation expense is in the selling expense category.

4. All sales and purchases are on account.

5. Accounts payable pertain to inventory purchase.

6. Selling and administrative expenses (except for depreciation) of $24,000 were paid in cash.

Required: Prepare a statement of cash flows for Lewis Limited using the direct method.