The comparative balance sheet of Medalist Athletic Apparel Co. at December 31, 2006 and 2005 is as follows:

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2006 are as follows:
a. Net income, $61,500.
b. Depreciation reported on the income statement, $17,900.
c. Equipment was purchased at a cost of $47,500, and fully depreciated equipment costing $12,500 was discarded, with no salvage realized.
d. The mortgage note payable was not due until 2009, but the terms permitted earlier payment without penalty.
e. 4,000 shares of common stock were issued at $26 for cash.
f. Cash dividends declared and paid, $48,000.

Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operatingactivities.

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Dec. 31, 2006 Dec. 31, 2005 Assets 37,200 61,200 91,000 5,500 190,500 (41,200) $344,200 45,300 65,400 85,600 4,000 155,500 (35,800) 320,000 Accumulated depreciation-equipment. Liabilities and Stockholders' Equity 65,400 95,000 10,000 100,000 49,600 320,000 Accounts payable (merchandise creditors) ..67,100 . . Common stock, $1 par.. Paid-in capital in excess of par-common stock 14,000 200,000 63,100 $344,200 .