The following financial statements were drawn from the records of Matrix Shoes:

Income Statement For the Year Ended December 31, Year 2

Sales revenue ...................................................................$300,000
Cost of goods sold ...........................................................(144,000)
Gross margin .....................................................................156,000
Operating expenses
Salary expense ...................................................................(88,000)
Depreciation expense .........................................................(9,800)
Utilities expense ..................................................................(6,400)
Operating income ................................................................51,800
Nonoperating items
Interest expense ..................................................................(2,400)
Loss on the sale of equipment .............................................(800)
Net income ........................................................................$ 48,600

Additional Information
1. Sold equipment costing $72,000 with accumulated depreciation of $56,000 for $15,200 cash.
2. Paid a $7,200 cash dividend to owners.

Required
Analyze the data and prepare a statement of cash flows using the direct method.

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Balance Sheets As of December 31 Year 2 Year 1 Assets $ 94,300 $ 14,100 40,000 64,000 Cash Accounts receivable 36,000 72,000 Merchandise inventory Notes receivable 16,000 170,000 (94,000) 30,000 $240,100 Equipment Accumulated depreciation-equipment Land 98,000 (47,800) 46,000 $298,500 Total assets Liabilities $ 24,000 $ 26,400 10,000 1,400 1,000 24,000 Accounts payable Salaries payable Utilities payable Interest payable Notes payable (long-term) Common stock Retained earnings 15,000 800 150,000 110,000 108,700 67,300 Total liabilities and equity $298,500 $240,100