Refer to the information for Booth Manufacturing below.

Required:
1. Calculate the cash flows from operations using the indirect method.
2. Prepare a statement of cash flows.
3. Conceptual Connection: Search the Internet to find a statement of cash flows. Which method was used-the indirect method or the direct method? How does the net income reported compare with the operating cash flows? To the change in cash flows?

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Booth Manufacturing Comparative Balance Sheets At December 31, 2011 and 2012 2011 2012 Assets Cash Accounts receivable $ 112,500 $350,000 281,250 150,000 1,000,000 ,025,000 (500,000)(525,000 718,750 $1.587 500 $2,000,000 350,000 125,000 Plant and equi Accumulated depreciation Land 500,000 Total assets Liabilities and equity Accounts payable Mortgage payable Common stock Paid-in capital in excess of par Retained eamings $300,000 237,500 250,000 75,000 300,000 912,500 1,137,500 $1.587 500 $2,000,000 75,000 300,000 Total liabilities and equity Booth Manufacturing Income Statement For the Year Ended December 31, 2012 Revenues Gain on sale of equipment Less: Cost of goods sold Less: Depreciation expense Less: Interest expense $1,200,000 50,000 (640,000] (125,000 35,000 450,000 Net income