I can't get from 142,000 net income to 170,200 Net cash flow from Operating activities.
I think the equipment or depreciation are tripping me up. Using indirect method so basically increases are (deducted) and decreases are added, I have determined:

Assets;
AR (8000) (from 22,000 to 30,000)
Merchandise Inventory 16000 (from 176,000 to 160,000)
Prepaid rent 2400 (from 4800 to 2400)
Equipment 32,000 (from 288,000 to 256,000)

Liabilities:
AP 9000 (from 76,000 to 67,000)
Salaries paid (4000) (from 24,000 to 28,000)

Accumulated depreciation went from (236,000) to (146,800) so I think it should be 89200. But, some equipment was sold; It cost 132,000 with accumulated depreciation of 112,000 and it sold for 20,000. There was also another equipment purchase made for 100,000. I think this is tripping me up either with the depreciation or the equipment.

I have manipulated the numbers every way I can think of and I come up at least 12,800 short. I have no idea what I am doing wrong! Help anyone!? Please.

Using indirect method so basically increases are (deducted) and decreases are added, I have determined:

Wrong. That doesn't work for liabilities because they have the opposite rule. Everyone always either does everything the opposite direction, or everything the same direction, when they have two different rules. Current liabilities go the same direction as the change, so increases are added and decreases are deducted.


Assets;
AR (8000) (from 22,000 to 30,000)
Merchandise Inventory 16000 (from 176,000 to 160,000)
prepaid rent 2400 (from 4800 to 2400)

All OK.


Equipment 32,000 (from 288,000 to 256,000)

Equipment isn't a current asset. Investing is all assets except current. Financing is all liabilities except current and all equity.

CURRENT assets and liabilities are related to operations. Since equipment is a plant asset, that's an investing activity.


Liabilities:
AP 9000 (from 76,000 to 67,000)
Salaries paid (4000) (from 24,000 to 28,000)

Backwards. And that's salaries payable, not salaries paid. I wasn't even sure what that was about until I came out 4000 off and figured that had to be a payable. That isn't the amount that was actually paid - it's an adjustment of the difference of what was recorded as expense and what was actually paid. (Figuring out why you're doing these adjustments make most people's brains hurt, but if you want to know, I'll explain it. But it's not because 4000 was paid.)


Accumulated depreciation went from (236,000) to (146,800) so I think it should be 89200. But, some equipment was sold; It cost 132,000 with accumulated depreciation of 112,000 and it sold for 20,000. There was also another equipment purchase made for 100,000. I think this is tripping me up either with the depreciation or the equipment.

Both. Clue: if depreciation goes down, that's not your expense. The current expense would make it go up. (And treat that as the absolute values. They are negatives because they subtract from the plant assets. But the balance in the accumulated depreciation is a positive number.)

When you sell something, you take its depreciation with it. You started with 236,000 and you take off the 112,000 that went with the sold equipment. Then where is your balance after that? You can get the expense from there.

I don't know if they're having you deal with gains and losses yet. You don't have one but always good to check: 132000 cost less 112000 depreciation = 20,000 book value. Sold for 20,000. So you have no gain or loss. But that should be looked at in case you do have one. Gains & losses go into operating in the indirect method.

See what you can do to fix that and if you're still not getting it, come back and show your re-workings.

Thank you so much for your help! I understand now that you have explained it and it makes perfect sense.

You're welcome. I'm glad I'm perfect at least occasionally. :-)