The following information is available for Cobalt Freight for the year ended December 31, 2026.
| Item | Amount |
|---|
| Net income | $55,000 |
| Depreciation expense | 18,000 |
| Loss on sale of equipment | 4,000 |
| Increase in accounts receivable | 7,000 |
| Decrease in inventory | 5,000 |
| Decrease in accounts payable | 3,000 |
Additional information:
- Equipment costing $30,000 (accumulated depreciation $18,000) was sold for $8,000 cash.
- New equipment was purchased for $45,000 cash.
- Common stock was issued for $25,000 cash.
- Cash dividends of $15,000 were paid.
- Cash was $18,000 at January 1, 2026.
Required: Prepare a statement of cash flows using the indirect method. The loss on sale is added back in operating activities; the $8,000 proceeds appear in investing.