The financial statements of Wildhorse Ltd., private company reporting under ASPE, follow:

WILDHORSE LTD.

Balance Sheet

December 31

Assets2017

2016

Cash$10,493$12,700Short-term notes receivable12,75022,050Accounts receivable30,20016,200Inventory31,70027,200Property, plant, and equipment72,10079,200Accumulated depreciation(32,200)(26,700)Total assets$125,043$130,650Liabilities and Shareholders' EquityAccounts payable$27,200$43,600Income tax payable4,10020,100Notes payable15,60010,600Common shares24,60024,600Retained earnings53,54331,750Total liabilities and shareholders' equity$125,043$130,650

WILDHORSE LTD.

Income Statement

Year Ended December 31, 2017

Sales$282,700Cost of goods sold193,100Gross profit89,600Operating expenses$36,550Loss on sale of equipment2,55039,100Profit from operations50,500Other revenues and expensesInterest revenue$(1,540)Interest expense2,5501,010Profit before income tax49,490Income tax expense16,597Profit$32,893

Additional information:1.Short-term notes receivable are from loans to other companies. During the year, the company collected the outstanding balance at December 31, 2016, and made new loans in the amount of $12,750.2.Equipment was sold during the year. This equipment cost $17,700 originally and had a carrying amount of $10,150 at the time of sale.

3.Equipment costing $10,600 was purchased in exchange for a $10,600 note payable.

4.Depreciation expense is included in operating expenses.

5.Accounts receivable are from the sale of merchandise on credit.

6.Accounts payable relate to the purchase of merchandise on credit.

Prepare the operating section of the cash flow statement using the direct method