Reference no: EM13518254

Hesselbaum Retail Corporation's most recent Income Statement and comparative Balance Sheet is as follows:

Hesselbaum Retail Corporation

Income Statement

For the Year Ended December 31, Year 2

Sales	$118,000
Less cost of goods sold	56,000
Gross margin	62,000
Less operating expenses	37,000
Net operating income	25,000
Less loss on sale of equipment	2,000
Income before taxes	23,000
Less income taxes	9,000
Net income	$ 14,000

Hesselbaum Retail Corporation

Comparative Balance Sheet

At December 31, Year 2, and Year 1

	Year 2	Year 1
Assets
Cash	$12,000	$ 4,000
Accounts receivable, net	29,000	7,000
Merchandise inventory	36,000	21,000
Prepaid expenses	6,000	8,000
Equipment	72,000	88,000
Accumulated depreciation	(60,000)	(57,000)
Total assets	$95,000	$71,000

Liabilities and stockholders' equity

Accounts payable	$17,000	$ 9,000
Wages payable	6,000	1,000
Taxes payable	2,000	3,000
Common stock	50,000	42,000
Retained earnings	20,000	16,000
Total liabilities and stockholders' equity	$95,000	$71,000

No direct exchange transactions occurred at Hesselbaum during Year 2. No equipment was purchased during Year 2. The accumulated depreciation on the equipment sold was $9,000. Cash dividends of $10,000 were declared and paid during Year 2. Hesselbaum uses the direct method to prepare its statement of cash flows.

Required:

Prepare Hesselbaum's operating activities section of its Year2 statement of cash flows.