XS Supply Company is developing its annual financial statements at December 31, 2013. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

______________________________2013_____________2012

Balance Sheet at December 31

Cash ................................. $ 34,000 ...... $ 29,000

Accounts Receivable .................. 35,000 ......... 28,000

Merchandise Inventory ................ 41,000 ......... 38,000

Property and Equipment ............. 121,000 ....... 100,000

Less: Accumulated Depreciation ..... (30,000) ..... (25,000)

......................................... $201,000 .... $170,000

Accounts Payable ...................... $ 36,000 ... $ 27,000

Wages Payable .......................... 1,200 ........ 1,400

Note Payable, Long-Term ............ 38,000 ....... 44,000

Contributed Capital .................... 88,600 ....... 72,600

Retained Earnings ...................... 37,200 ....... 25,000

........................................ $201,000 ..... $170,000

Income Statement for 2013

Sales ............................. $120,000

Cost of Goods Sold ............. 70,000

Other Expenses ................... 37,800

Net Income ..................... $ 12,200

Additional Data:

a. Bought equipment for cash, $21,000.

b. Paid $6,000 on the long-term note payable.

c. Issued new shares of stock for $16,000 cash.

d. No dividends were declared or paid.

e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; other, $6,800.

f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:

1. Prepare the statement of cash flows for the year ended December 31, 2013, using the indirect method.

2. Evaluate the statement of cash flows?