Heads Up Company was started several years ago by two hockey instructors. The companys comparative balance sheets and income statement follow, along with additional information.

	Current Year	Previous Year
Balance Sheet at December 31
Cash	$ 6,000	$ 4,500
Accounts Receivable	1,000	1,950
Equipment	6,700	6,000
Accumulated DepreciationEquipment	(1,600)	(1,350)
Total Assets	$ 12,100	$ 11,100
Accounts Payable	$ 500	$ 1,100
Salaries and Wages Payable	400	750
Notes Payable (long-term)	1,500	500
Common Stock	6,000	6,000
Retained Earnings	3,700	2,750
Total Liabilities and Stockholders Equity	$ 12,100	$ 11,100
Income Statement
Service Revenue	$ 39,500
Salaries and Wages Expense	37,000
Depreciation Expense	600
Loss on Disposal of Equipment	650
Income Tax Expense	300
Net Income	$ 950

Additional Data:

1. Bought new equipment for $2,300 cash and sold existing equipment for $600 cash. The equipment that was sold had cost $1,600 and had Accumulated Depreciation of $350 at the time of sale.
2. Borrowed $1,000 cash from the bank during the year.
3. Accounts Payable includes only purchases of services made on credit for operating purposes. Because there are no liability accounts relating to income tax, assume that this expense was fully paid in cash.

Required:

1. Prepare the statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)