Ingersol Construction Supply Company is developing its annual financial statements at December 31, 2012. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

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. Dividends of $15,000 were declared and paid in cash.
e. Other expenses included depreciation, $5,000; wages, $20,000; taxes, $6,000; and 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 using the indirect method for the year ended December 31, 2012.2. Evaluate the statement of cashflows.

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2011 2012 Balance sheet at December 31 $ 34,000 $ 29,000 Cash Accounts receivable 45,000 28,000 Merchandise inventory Property and equipment Less: Accumulated depreciation 32,000 38,000 121,000 100,000 (30,000) (25,000) $170,000 $202.000 $ 36,000 $ 27,000 Accounts payable Wages payable Note payable, long-term Contributed capital Retained earnings 2,200 1,400 40,000 46,000 86,600 70,600 37,200 25.000 $170,000 $202,000 Income statement for 2012 Sales $135,000 Cost of goods sold Other expenses 70,000 37,800 $ 27,200 Net income