The 2021 and 2020 balance sheets of Gibson Corporation follow. The 2021 income statement is also provided. Gibson had no noncash investing and financing transactions during 2021. During the year, the company sold equipment for $15,200, which had originally cost $12,800 and had a book value of $11,300. The company did not issue any notes payable during the year but did issue common stock for $31,000. The company purchased plant assets and long-term investments with cash.

Requirements
1. Prepare the statement of cash flows for Gibson Corporation for 2021 using the indirect method.
2. Evaluate the company’s cash flows for the year. Discuss each of the categories of cash flows in your response.

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LN3HSONGENS45618 2 7 9 10 11 12 13 Operating income 16 17 Sales revenues Less: Cost of goods sold Gross profit Less operating expenses: Salaries and wages expense Depreciation expense Other operating expenses Total operating expenses 14 Plus other income and less other expenses: 18 A Gibson Corporation Income Statement For the Year Ended December 31, 2021 Interest expense Gain on sale of PP&E Total other income and expenses Income before income taxes $ B 25,000 4,700 13,000 9,300 3,900 $ $ $ $ C 344,000 77,000 267,000 42,700 224,300 5,400 218,900