The following are the balance sheets of Farrell Corporation as of December 31, 2007 and 2006, and the statement of income and retained earnings for the year ended December 31, 2007:

Additional information:
1. On January 2, 2007 Farrell sold equipment costing $45,000, with a book value of $24,000, for $19,000 cash.
2. On April 2, 2007 Farrell issued 1,000 shares of common stock for $23,000 cash.
3. On May 14, 2007 Farrell sold all of its treasury stock for $25,000 cash.
4. On June 1, 2007 Farrell paid $50,000 to retire bonds with a face value (and book value) of $50,000.
5. On July 2, 2007 Farrell purchased equipment for $63,000 cash.
6. On December 31, 2007 land with a fair market value of $150,000 was purchased through the issuance of a long-term note in the amount of $150,000. The note bears interest at the rate of 15% and is due on December 31, 2012.
7. Deferred taxes payable represent temporary differences relating to the use of accelerated depreciation methods for income tax reporting and the straight-line method for financial statement reporting.
Required
1. Prepare a worksheet (spreadsheet) to support a statement of cash flows for the Farrell Corporation for the year ended December 31, 2007, based on the preceding information.
2. Prepare the statement of cashflows.

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Balance Sheets December 31 Increase Decrease 2007 2006 Assets Cash Accounts receivable, net investment in Hall, Inc., at equity Land Plant and equipment Less: Accumulated depreciation Patent 225,000 295,000 549,000 73,000 350,000 624,000 (139,000) 16,000 180,000 305,000 431,000 60,000 200,000 606,000 (107,000) 20,000 (10,000) 118,000 13,000 150,000 18,000 (32.000) 4,000) Total assets $298,000 Liabilities and Stockholders Equity Accounts payable and accrued expenses Note payable, long-term Bonds payable $ 604,000 150,000 160,000 41,000 410,000 196,000 432,000 $ 41,000 150,000 (50,000) 11,000 10,000 21,000 98,000 17,000 $298,000 563,000 210,000 30,000 400,000 175,000 334,000 taxes Common stock, S10 par Additional paid-in capital Retained earnings Treasury stock, at cost Total liabilities and stockholders' equity (17000) $1,695,000 $1,993,000 Statement of Income and Retained Earnings For the Year Ended December 31, 2007 Net sales $1950,000 Operating expenses: Cost of sales Selling and administrative expenses Depreciation 1,150,000 505,000 53,000 1.708.000 242,000 Operating income me Interest expense 15,000 (13,000) 5,000 Equity in net income of Hall, Inc. Loss on sale of equipment Amortization of patent Income before income taxes Income taxes 231,000 79,000 11,000 90,000 S 141,000 334,000 475,000 43,000 S 432,000 Current Deferred Provision for income taxes Net income Retained earnings, January 1, 2007 Cash dividends, paid August 13, 2007 Retained eamings, December 31, 2007