Condensed financial data of Cheng Inc. follow.

Additional information:
1. New equipment costing $85,000 was purchased for cash during the year.
2. Old equipment having an original cost of $57,500 was sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.

Instructions
Prepare a statement of cash flows using the indirect method.

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Cheng Inc. Comparative Balance Sheets December 31 Assets 2020 2019 $ 80,800 92,800 $ 48,400 Cash Accounts receivable 33,000 Inventory Prepaid expenses 117,500 28,400 102,850 26,000 143,000 Investments 114,000 270,000 Equipment Accumulated depreciation-equipment 242,500 (50,000) (52,000) Total $682,500 $514,750 Liabilities and Stockholders’ Equity Accounts payable Accrued expenses payable Bonds payable $ 67,300 $112,000 16,500 110,000 220,000 17,000 150,000 175,000 Common stock Retained earnings 224,000 105,450 Total $682,500 $514,750 Cheng Inc. Income Statement For the Year Ended December 31, 2020 Sales revenue $392,780 Less: Cost of goods sold Operating expenses, excluding depreciation Depreciation ex pense Income tax expense Interest expense $135,460 12,410 46,500 27,280 4,730 Loss on disposal of plant assets 7,500 233,880 Net income $158,900