ReferencesCheck my workCheck My Work button is now enabled1Item 22 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 $ 124,449 $ 29,120 Accounts receivable 56,119 64,980 Merchandise inventory 131,205 118,710 Notes receivable 0 31,200 Equipment 150,500 259,200 Accumulated depreciationequipment (75,975 ) (139,340 ) Land 81,500 50,500 Total assets $ 467,798 $ 414,370 Liabilities Accounts payable $ 42,735 $ 49,450 Salaries payable 33,788 27,030 Utilities payable 673 1,345 Interest payable 0 2,060 Notes payable (long-term) 0 63,500 Common stock 298,500 239,800 Retained earnings 92,102 31,185 Total liabilities and equity $ 467,798 $ 414,370 Income Statement For the Year Ended December 31, Year 2 Sales revenue $ 582,850 Cost of goods sold (289,414 ) Gross margin 293,436 Operating expenses Salaries expense (183,320 ) Depreciation expense (18,985 ) Utilities expense (11,480 ) Operating income 79,651 Nonoperating items Interest expense (3,447 ) Loss on the sale of equipment (1,400 ) Net income $ 74,804 Additional Information Sold equipment costing $108,700 with accumulated depreciation of $82,350 for $24,950 cash. Paid a $13,887 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.)