The income statement and additional data of Capitol Hill Corporation follow:

Additional data:

a. Collections from customers are Si 5,000 more than sales.

b. Dividend revenue, interest expense, and income tax expense equal their cash amounts.

c. Payments to suppliers are the sum of cost of goods sold plus advertising expense.

d. Payments to employees are $1,000 more than salary expense.

e. Acquisition of plant assets is $101,000.

f. Cash receipts from sale of land total $24,000.

g. Cash receipts from issuance of common stock total $30,000.

h. Payment of long-term note payable is $15,000.

i. Payment of dividends is $11,000.

j. Cash balance, June 30, 2005, was $20,000; June 30, 2006, was $27,000.

Requirement 

Prepare Capitol Hill Corporation's statement of cash flows for the year ended June 30, 2006. Use the direct method. Follow the format given in Exhibit L6A-3.

Exhibit 16A-3

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Revenues: CAPITOL HILL CORPORATION Income Statement Year Ended June 30, 2006 Sales revenue Dividend revenue $229,000 8,000 $237,000 Expenses: Cost of goods sold $103,000 Salary expense 45.000 Depreciation expense 28,000 Advertising expense 12,000 Interest expense 2,000 Income tax expense 9.000 Net income 199,000 $ 38,000