Using financial statements to prepare statements of cash flows'Indirect method The comparative balance sheets and income

Using financial statements to prepare α statements of cash flows'Indirect method The comparative balance sheets and income statements for Pacific Company follow.

Additional Data
1. During 2012, the company sold equipment for $18,500; it had originally cost $30,000. Accumulated depreciation on this equipment was $12,000 at the time of the sale. Also, the company purchased equipment for $7,000 cash.
2. The company sold land that had cost $4,000. This land was sold for $3,950, resulting in the recognition of a $50 loss. Also, common stock was issued in exchange for title to land that was valued at $12,000 at the time of exchange.
3. P aid dividends of $9,200.
Required
Prepare a statement of cash flows using the indirect method.

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Balance Sheets As of December 31 2012 2011 Assets $ 2,800 1,200 6,000 42,000 (17,400) Cash $24,200 2,000 6,400 19,000 (9,000) Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land 18,400 $61,000 10,400 $45,000 Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity $ 2,600 2,800 22,000 33,600 $61,000 $4,200 6,400 10,000 24,400 $45,000 Income Statement For the Year Ended December 31, 2012 Sales revenue $35,700 (14,150) 21,550 (3,600) Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land 17,950 500 (50) Net income $18,400