01.8A. Statement of Cash Flows (Direct Method) Refer to the data given for the Pruitt Company in Prob- L04 lem P12-3A. (App 12A Required a. Compute the change in cash that occurred in 2019. b. Prepare a statement of cash flows using the direct method. Use one cash outflow for "cash paid for wages and other operating expenses." Accounts payable relate to inventory purchases only. 1 i...n for the Sky Camnany in Prob- L 6. Prepe a SLIM LO2 P12-3A. Statement of Cash Flows (Indirect Method) The Pruitt Company's income statement and parative balance sheets as of December 31 of 2019 and 2018 follow: PRUITT COMPANY Income Statement For the Year Ended December 31, 2019 $770,000 Sales revenue............. Cost of goods sold .......... Wages and other operating expenses ..... Depreciation expense.......... Goodwill amortization expense................. Interest expense......... Income tax expense........ Loss on bond retirement....... Net income .......... ... $450,000 195,000 22,000 7,000 5,000 36,000 5,000 720,000 $ 50,000 PRUITT COMPANY Balance Sheets Dec. 31, 2019 Dec. 31, 2018 ... H V GR . . . . . . . . . . . . . Assets Cash Accounts receivable........ Inventory......... Prepaid expenses................................. Plant assets ................. Accumulated depreciation ........... Goodwill. $ 8,000 43,000 101.000 12,000 360,000 (87,000) 43,000 $480,000 $ 19,000 28,000 131,000 11,000 334,000 (84,000) 50,000 $489,000 Total assets .......... continued e Cambridge Business Publishers Chapter 12 Statement of Cash Flow continued from previous page PRUITT COMPANY Balance Sheets Dec. 31, 2019 Dec. 31, 2018 Liabilities and Stockholders' Equity Accounts payable.... Interest payable ..... Income tax payable .... Bonds payable ...... Common stock ............. Retained earnings ................ .. .. Total liabilities and stockholders' equity .......... $ 32,000 3,000 6,000 60,000 252,000 127,000 $480,000 $ 28,000 7,000 8,000 100,000 248,000 98,000 $489,000 During the year, the company sold for $15,000 cash old equipment that had cost $34,000 and had $19,000 accumulated depreciation. New equipment worth $60,000 was acquired in exchange for $60,000 of bonds payable. Bonds payable of $100,000 were retired for cash at a loss. A $21,000 cash dividend was declared and paid. All stock issuances were for cash. Required a. Compute the change in cash that occurred in 2019. h Prenare a statement of cash flows using the indirect method