Problem 14-21A (Algo) Using financial statements to prepare a statement of cash flows-direct method LO 14-2, 14-3, 14-4

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

Balance Sheets As of December 31
	Year 2				Year 1
Assets
Cash	$	116,449			$	25,490
Accounts receivable		56,801				65,770
Merchandise inventory		130,885				118,420
Notes receivable		0				31,200
Equipment		145,200				250,400
Accumulated depreciationequipment		(72,636	)			(137,990	)
Land		84,500				54,000
Total assets	$	461,199			$	407,290
Liabilities
Accounts payable	$	39,917			$	46,190
Salaries payable		33,288				26,630
Utilities payable		649				1,298
Interest payable		0				2,480
Notes payable (long-term)		0				64,500
Common stock		294,800				239,800
Retained earnings		92,545				26,392
Total liabilities and equity	$	461,199			$	407,290

Income Statement For the Year Ended December 31, Year 2
Sales revenue	$	584,540
Cost of goods sold		(290,253	)
Gross margin		294,287
Operating expenses
Salaries expense		(181,790	)
Depreciation expense		(15,086	)
Utilities expense		(11,510	)
Operating income		85,901
Nonoperating items
Interest expense		(2,558	)
Loss on the sale of equipment		(2,110	)
Net income	$	81,233

Additional Information

1. Sold equipment costing $105,200 with accumulated depreciation of $80,440 for $22,650 cash.

2. Paid a $15,080 cash dividend to owners.

Required:

Analyze the data and prepare a statement of cash flows using the direct method. (Amounts to be deducted and cash outflows should be indicated by a minus sign.)