Using financial statements to prepare a statement of cash flows'Indirect method The comparative balance sheets and an income statement for Redwood Corporation follow.

Other Information
1. Purchased land for $112,000.
2. Purchased new equipment for $100,000.
3. Sold old equipment that cost $132,000 with accumulated depreciation of $112,000 for $20,000 cash.
4. Issued common stock f or $50,000.
Required
Prepare the statement of cash flows for 2012 using the indirect method.

Balance Sheets As of December 31 2012 2011 Assets $ 68,800 $ 40,600 22,000 176,000 4,800 Cash Accounts receivable 30,000 160,000 2,400 256,000 (146,800) 192,000 $562,400 Merchandise inventory Prepaid rent Equipment Accumulated depreciation Land 288,000 (236,000) 80,000 $375,400 Total assets Liabilities $ 76,000 24,000 $ 67,000 28,000 Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $25 par value Retained earnings Total liabilities and stockholders' equity 200,000 75,400 $375,400 250,000 217,400 $562,400 Income Statement For the Year Ended December 31, 2012 Sales $1,500,000 Cost of goods sold Gross profit Operating expenses Depreciation expense Rent expense (797,200) 702,800 (22,800) (24,000) (256,000) (258,000) $ 142,000 Salaries expense Other operating expenses Net income