Preparing a statement of cash flows with disposal of long-term assets. Condensed financial statement data for Hale Company for the current year appear in Exhibits 4.25 and 4.26.

During the current year, the firm sold for $5,000 equipment costing $15,000 with $10,000 of accumulated depreciation. The text does not treat this transaction, but see Problem 4.5 for Self-Study, which illustrates how to deal with it.

a. Prepare statements of cash flows for Hale Company for the year using the indirect and direct methods of computing cash flow from operations. Support the statements with a columnar 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.