Use the following information of VPI Company to prepare a statement of cash flows for the year ended December 31 using the indirect method.

Note: Amounts to be deducted should be indicated by a minus sign.

Cash balance at prior year-end Increase in inventory Depreciation expense Cash received from issuing stock Cash paid for dividends $40,000 Gain on sale of machinery 5,000 Cash received from sale of machinery 4,000 Increase in accounts payable 8,000 Net income 1,000 $2,000 9,500 1,500 23,000 3,000 \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{ VPI COMPANY } \\ \hline \multicolumn{4}{|c|}{ Statement of Cash Flows (Indirect Method) } \\ \hline \multicolumn{4}{|c|}{ For Current Year Ended December 31} \\ \hline \multicolumn{4}{|l|}{ Cash flows from operating activities } \\ \hline Net income & 23,000 & & \\ \hline \multicolumn{4}{|c|}{ Adjustments to reconcile net income to net cash provided by operating activities } \\ \hline \multicolumn{4}{|l|}{ Income statement items not affecting cash } \\ \hline Depreciation expense & 4,000 & & \\ \hline Gain on sale of machinery & (2,000) & & \\ \hline \multicolumn{4}{|c|}{ Changes in current operating assets and liabilities } \\ \hline Decrease in accounts receivable & 3,000 & & \\ \hline ncrease in inventory & (5,000) & & \\ \hline ncrease in accounts payable & 1,500 & & \\ \hline \\ \hline 7 & & $ & 24,500 \\ \hline \multicolumn{4}{|l|}{ Cash flows from investing activities } \\ \hline Cash received from sale of machinery & 2,800 & & \\ \hline \\ \hline & & & 2,800 \\ \hline \multicolumn{4}{|l|}{ Cash flows from financing activities } \\ \hline Cash received from issuing stock & 8,000 & & \\ \hline Cash paid for dividends & (1,000) & & \\ \hline= & & & \\ \hline Net cash provided by financing activities & & & 7,000 \\ \hline Net increase in cash & & $ & 34,300 \\ \hline Cash balance at prior year-end & & & 40,000 \\ \hline Cash balance at current year-end & & $ & 74,300 \\ \hline \end{tabular}