Statement of Cash Flows $($Direct Method$)$

Wolff Company's income statement and comparative balance sheets follow.

WOLFF COMPANY

Income Statement

For Year Ended December $31,2019$

Sales $$889,000$

Cost of goods sold $$602,000$

Wages expense $120,400$

Insurance expense $11,200$

Depreciation expense $23,800$

Interest expense $12,600$

Income tax expense $40,600810,600$

Net income $$78,400$

WOLFF COMPANY

Balance Sheet

Dec. $31,2019$ Dec. $31,2018$

Assets

Cash $$15,400$ $$7,000$

Accounts receivable $57,40044,800$

Inventory $126,00084,000$

Prepaid insurance $7,0009,800$

PPE $350,000273,000$

Accumulated depreciation $(95,200)(71,400)$

Total assets $$460,600$ $$347,200$

Liabilities and Stockholders' Equity

Accounts payable $$9,800$ $$14,000$

Wages payable $12,6008,400$

Income tax payable $9,80011,200$

Bonds Payable $182,000105,000$

Common stock $126,000126,000$

Retained earnings $120,40082,600$

Total liabilities and equity $$460,600$ $$347,200$

Cash dividends of $$40,600$ were declared and paid during $2019.$ Also in $2019,$ PPE was purchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannually on June $30$ and December $31.$ Accounts payable relate to merchandise purchases.