Using financial statements to prepare a statement of cash flows'Direct method The following financial statements were drawn from the records of Norton Materials, Inc.

Additional Information
1. Sold equipment costing $72,000 with accumulated depreciation of $56,000 for $15,200 cash.
2. Paid a $7,200 cash dividend to owners.
Required
Analyze the data and prepare a statement of cash flows using the direct method.

Balance Sheets As of December 31 2012 2011 Assets $ 94,300 36,000 72,000 $ 14,100 40,000 64,000 16,000 170,000 (94,000) 30,000 Cash Accounts receivable Inventory Notes receivable (long-term) Equipment Accumulated depreciation-equipment 98,000 (47,800) 46,000 $298,500 Land $240,100 Total assets Liabilities and equity Accounts payable Salaries payable Utilities payable Interest payable Notes payable (long-term) Common stock $ 24,000 15,000 $ 26,400 10,000 1,400 1,000 24,000 110,000 67,300 $240,100 800 150,000 108,700 $298,500 Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, 2012 $300,000 (144,000) Sales revenue Cost of goods sold Gross margin Operating expenses Salary expense Depreciation expense Utilities expense 156,000 (88,000) (9,800) (6,400) Operating income Nonoperating items Interest expense Loss on sale of equipment 51,800 (2,400) (800) $ 48,600 Net income