The Following Data Is Provided:
Income Statement
for the Year

The following data is provided:
Income Statement
For the Year Ended Dec. 31, 2011 $\begin{array} { | l | l | } \hline \text { Net sales } & \$ 375,000 \\\hline \text { Cost of goods sold } & ( 200,000 ) \\\hline \text { Cash operating expenses } & ( 100,000 ) \\\hline \text { Depreciation and amortization expense } & ( 25,000 ) \\\hline \text { Gain on sale of equipment } & 15,000 \\\hline \text { Net income } & \$ 65,000 \\\hline\end{array}$
Additional information: $\begin{array} { | l | l | } \hline \text { 1. Increase in accounts receivable during2011 } & \$ 10,000 \\\hline \text { 2. Decrease in inventory during 2011 } & \$ 7,500 \\\hline \text { 3. Increase in accounts payable during 2011 } & \$ 11,000 \\\hline \text { 4. Sale of old equipment for cash } & \$ 32,500 \\\hline \text { 5. Dividends declared - } \$ 22,500 \text {; dividends paid } & \$ 20,000 \\\hline \text { 6. New building acquired by issuing common shares } & \$ 21,000 \\\hline \text { 7. Sold bonds for cash - proceeds of } & \$ 37,500 \\\hline\end{array}$ Required:
Prepare a Statement of Cash Flows, direct method. Include a reconciliation of earnings and net operating cash flow.