Preparing and interpreting a statement of cash flows using a T-account work sheet. Condensed financial statement data for Hale Company for the current year appear in Exhibits 4.24 and 4.25. During the current year, the firm sold for \(\$ 5,000\) equipment costing \(\$ 15,000\) with \(\$ 10,000\) of accumulated depreciation.

a. Prepare a statement of cash flows for Hale Company for the year using the indirect method of computing cash flow from operations. Support the statement with a T-account work sheet.

b. Calculate the amount of cash received from customers during the year.

c. Calculate the amount of cash paid to suppliers of inventory during the year.

d. Calculate the amount of cash paid to lenders for interest during the year.

e. Comment on the pattern of cash flows from operations, investing, and financing activities.

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EXHIBIT 4.24 ASSETS Cash Accounts Receivable HALE COMPANY Comparative Balance Sheet (Problem 27) January 1 December 31 $ 52,000 93,000 $ 58,000 106,000 Inventory 151,000 162,000 Land 30,000 30,000 Buildings and Equipment (cost) 790,000 830,000 Less Accumulated Depreciation (460,000) (504,000) Total Assets $656,000 $682,000 LIABILITIES AND SHAREHOLDERS' EQUITY Accounts Payable for Inventory $136,000 $141,000 Interest Payable 10,000 8,000 Mortgage Payable 120,000 109,000 Common Stock 250,000 250,000 Retained Earnings 140,000 174,000 Total Liabilities and Shareholders' Equity $656,000 $682,000