Reference no: EM13522095

Andrews Inc., a greeting card company, had the following statements prepared as of December 31, 2012.

ANDREWS INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2012 AND 2011
		12/31/12			12/31/11
Cash		$5,890			$8,992
Accounts receivable		62,200			49,131
Short-term investments (available-for-sale)		34,888			18,110
Inventory		39,922			60,138
Prepaid rent		4,991			4,047
Equipment		153,710			128,060
Accumulated depr."equipment		(34,823	)		(25,013	)
Copyrights		46,037			49,864
Total assets		$312,815			$293,329
Accounts payable		$45,929			$42,103
Income taxes payable		4,149			5,970
Salaries and wages payable		7,871			3,817
Short-term loans payable		7,962			9,818
Long-term loans payable		60,143			67,132
Common stock, $10 par		104,300			104,300
Contributed capital, common stock		28,790			28,790
Retained earnings		53,671			31,399
Total liabilities & stockholders' equity		$312,815			$293,329

ANDREWS INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2012
Sales				$339,167
Cost of goods sold				175,290
Gross margin				163,877
Operating expenses				119,690
Operating income				44,187
Interest expense		$11,436
Gain on sale of equipment		2,094		9,342
Income before tax				34,845
Income tax expense				6,792
Net income				$28,053

1. Dividends in the amount of $5,781 were declared and paid during 2012.

2. Depreciation expense and amortization expense are included in operating expenses.

3. No unrealized gains or losses have occurred on the investments during the year.

4. Equipment that had a cost of $31,120 and was 70% depreciated was sold during 2012.

Prepare a statement of cash flows using the direct method.