EXPANDED STATEMENT OF CASH FLOWS Financial statements for McDowell Company as well as additional information relevant to cash flows during the period are given below and on page 914.

Additional information:
1. Store equipment was sold in 20-2 for $25,000. Additional information on the store equipment sold is provided below.
Cost..............$ 70,000
Accumulated depreciation........(30,000)
Book value............$ 40,000
Market value............25,000
Loss on sale...........$ 15,000
2. Depreciation expense for the year was $112,000.
3. The following purchases were made for cash:
Store equipment..........$ 64,000
Delivery equipment.........140,000
Office equipment...........30,000
..................$234,000

4. Declared and paid cash dividends of $60,000.
5. Issued 10,000 shares of $10 par common stock for $14 per share.
6. Acquired additional store equipment by issuing a note payable for $16,000.
REQUIRED
Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31,20-2.

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McDowell Company Income Statement For Year Ended December 31, 20-2 Net sales $1,890| 01 이 이 00 940 0 0 0 00 $ 950 0 0 0 00 Cost of goods sold Gross profit Operating expenses 572 3 00 00 $ 377| 기 0 0 00 Operating income Other revenues and expenses: $ 3 9 0 0 00 이 9101 001 (15 0 0 0 00 Interest revenue Interest expense (11 9 9 0 00) S 365| 기 1| 0| 00 Loss on sale of store equipment Income before taxes 133| 01 0 이1 00 Income tax experse $ 232 7 1 0 00 Net income McDowell Company Statement of Retained Earnings For Year Ended December 31, 20-2 $3601 01 0 이 0 Retained earnings, January 1, 20-2 $232| 기 1| 01 00 60 0 0 0 00 Net income Less dividends 172| 기 1| 01 00 $532| 기 1| 01 00 Net ingease in retained earnings Retained earnings, December 31, 20-2