Sold equipment costing 48000 with accumulated depreciation

Question

The following financial statements were drawn from the records of Boston Materials, Inc.: 

Income Statement
For the Year Ended December 31, 2014
Sales revenue ....... $450,000
Cost of goods sold ...... (212,000)
Gross margin ........ 238,000
Operating expenses
Salary expense ........ (96,000)
Depreciation expense .... (18,500)
Utilities expense ....... (7,500)
Operating income ...... 116,000
Nonoperating items
Interest expense ....... (3,500)
Gain on sale of equipment ... 1,500
Net income ........ $114,000

Additional Information

1. Sold equipment costing $48,000 with accumulated depreciation of $26,000 for $23,500 cash. 2. Paid a $50,000 cash dividend to owners. 

Required

Analyze the data and prepare a statement of cash flows using the direct method.