Condensed financial information for Entity A is presented below.
Entity A
Comparative Balance Sheets
December 31, 2018
		Assets
			2018	2017
Cash			37,000	33,000
Accounts receivable			57,000	41,000
Inventory			45,000	48,000
Prepaid expenses			17,000	14,000
Long-term investments			162,000	130,000
Plant assets			580,000	520,000
Accumulated depreciation			-211,000	-180,000
Total			687,000	606,000
		Liabilities and Stockholders' Equity
Accounts payable			44,000	51,000
Accrued expenses payable			21,000	15,000
Bonds payable			180,000	220,000
Common stock			175,000	150,000
Retained earnings			267,000	170,000
Total			687,000	606,000
Entity A
Income Statement
For the year ending December 31, 2018
Sales revenue				610,000
Less:
Cost of goods sold			290,000
Operating expenses			65,000
Depreciation expense			50,000
Income tax expense			47,000
Interest expense			12,000
Loss on disposal of plant assets			9,000	473,000
Net income				137,000
In addition:
1. Accounts payable pertain to merchandise creditors.
2. A cash dividend of $40,000 was declared and paid during the year.
3. Old plant assets with an original cost of $30,000 were sold for $2,000 cash.
4. Some of the bonds payable matured and were redeemed at face.
5. New plant assets costing $90,000 cash were purchased during the year.
1. Prepare a statement of cash flows using the direct method.
2. Prepare a reconciliation statement.