The comparative balance sheets and an income statement for Wang Beauty Products, Inc. are shown next:

Income Statement For the Year Ended December 31, Year 2

Sales ................................................................... $1,500,000
Cost of goods sold ............................................... (797,200)
Gross profit ............................................................702,800
Operating expenses
Depreciation expense .............................................(22,800)
Rent expense ..........................................................(24,000)
Salaries expense .....................................................(256,000)
Other operating expenses ........................................(258,000)
Net income ................................................................$ 142,000

Other Information
1. Purchased land for $112,000.
2. Purchased new equipment for $100,000.
3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,000 for $20,000 cash.
4. Issued common stock for $50,000.

Required
Prepare the statement of cash flows for Year 2 using the indirect method.

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Balance Sheets As of December 31 Year 1 Year 2 Assets $ 68,800 $ 40,600 Cash Accounts receivable 30,000 22,000 160,000 2,400 256,000 Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land 176,000 4,800 288,000 (146,800) 192,000 $562,400 (236,000) 80,000 $375,400 Total assets Liabilities and equity Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $50 par value Retained earnings $ 67,000 $ 76,000 24,000 28,000 200,000 250,000 217,400 75,400 Total liabilities and equity $562,400 $375,400