Use the following financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2011 using the indirect method.

Balance Sheet

	2011	2010
Assets:
Cash	85,600	65,200
Accounts receivable, net	72,850	56,750
Merchandise Inventory	157,750	144,850
Prepaid Expenses	6,080	12,680
Equipment	280,600	245,600
Accumulated depreciation- equip.	(80,600)	(97,600)
Total Assets:	$522,280	$427,480
Liabilities:
Accounts payable	52,850	45,450
Income Taxes payable	15,240	12,240
Notes payable (long term)	59,200	79,200
Total liabilities	127,290	136,890
Equity:
Common stock	200,000	150,000
Contributed capital in excess of par	53,000	40,000
Retained Earnings	141,900	100,590
Total Equity	394,990	290,590
Total Liabilities and equity	$522,280	$427,480

Income Statement

Sales		488,000
Cost of goods sold	212,540
Depreciation Expense	43,000
Other operating expenses	106,260
Interest expense	6,400	(368,200)
Other gains (loses):
Gain on sale of equipment		4,700
Income before taxes		124,500
Income taxes expense		41,100
Net income		$83400

Additional information:

a. A $20,000 note payable is retired at it's carrying value in exchange for cash.

b. the only changes affecting ratained earnings are net income and cash dividends paid.

c. New equipment is acquired for $120,000 cash.

d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700

e. Prepaid expense relate to Other Expenses on the income statement.

f. All purchases and sales of merchandise inventory are on credit.