The financial statements of Milk River Ltd. follow:

Additional information:
1. Equipment costing $24,000 was purchased with an $8,000 down payment and the remainder was financed with a note payable.
2. During the year, equipment was sold for $10,500 cash. This equipment had cost $12,000 originally and had a carrying amount of $8,500 at the time of sale.
3. All depreciation expenses are in the operating expenses category.
4. Notes payable were also repaid during the year.
Instructions
Prepare a cash flow statement for the year using the indirect method.
TAKING IT FURTHER
If equipment was both purchased and sold during the year, is it important to show both of these transactions? Or is it sufficient to show only the net increase or decrease in equipment, similar to how increases and decreases in inventory are shown?

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MILK RIVER LTD. Balance Sheet December 31 Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Goodwil 2017 2016 $13,000 32,000 33,000 90,000 (30,000) 5,000 $143,000 $ 5,000 24,000 20,000 78,000 (24,000) 16,000 $119,000 Total assets Liabilities and Shareholders' Equit Accounts payable Income taxes payable Notes payable Common shares Retained earnings 18,000 2,000 42,000 18,000 63,000 $143,000 15,000 4,000 52,750 14,000 33,250 $119,000 Total liabilities and shareholders' equity MILK RIVER LTD. Income Statement Year Ended December 31, 2017 Sales Cost of goods sold Gross profit Operating expenses Gain on sale of equipment Impairment loss on goodwill Profit from Other revenues and expenses $256,000 140,000 116,000 $64,000 (2,000) 11,000 73,000 43,000 operations Interest expense Profit before income tax Income tax expense Profit 4,000 39,000 9,250 29,750