a. Calculate the change in cash and cash equivalents that occurred during 2019

b . Prepare a statement of cash flows using the indirect method.

P12-4A Statement of Cash Flows (Indirect Method) TheSky Company's income statement and comparative balance sheets as of December 31 of 2019 and 2018 follow: Sales revenue Dividend income Cost of goods sold Wages and other operating expenses Depreciation expense Patent amortization expense Interest expense Income tax expense Loss on sale of equipment Gain on sale of investments Net income Assets Cash and cash equivalents Accounts receivable Inventory Prepaid expenses Long-term investments-available for sale Fair value adjustment to investments Land Buildings Accumulated depreciation-Buildings Equipment Accumulated depreciation-Equipment Patents Total assets Liabilities and Stockholders' Equity Accounts payable Interest payable Income tax payable Bonds payable SKY COMPANY Income Statement for Year Ended December 31, 2019 Preferred stock ($100 par value) Common stock ($5 par value) Paid-in-capital in excess of par value-Common Retained earnings Unrealized gain on investments Total liabilities and stockholders' equity SKY COMPANY Balance Sheets $440,000 130,000 39,000 7,000 13,000 30,000 5,000 (10,000) Dec. 31, 2019 $63,000 45,000 100,000 10,000 190,000 445,000 (91,000) 179,000 (42,000) 50,000 $949,000 Required a. Calculate the change in cash and cash equivalents that occurred during 2019. b. Prepare a statement of cash flows using the indirect method. $21,000 6,000 8,000 135,000 100,000 379,000 133,000 167,000 $949,000 2 Purchased land for cash. 3 Capitalized an expenditure made to improve the building. 4 old equipment for $14,000 cash that originally cost $46,000 and had $27,000 accumulated depreciation. 5 Issued bonds payable at face value for cash. 6 Kcquired a patent with a fair value of $25,000 by issuing 250 shares of preferred stock at par value. 7 Declared and paid a $53,000 cash dividend. 8ssued 3,000 shares of common stock for cash at $8 per share. 9 Kecorded depreciation of $16,000 on buildings and $23,000 on equipment. $800,000 19,000 819,000 654,000 $165,000 Dec. 31, 2018 $29,000 35,000 77,000 6,000 50,000 7,000 During the year, the following transactions occurred: 1 Bold long-term investments costing $50,000 for $60,000 cash. Unrealized gains totaling $7,000 related to these investments had been recorded in earlier years. At year-end, the fair value adjustment and unrealized gain account balances were eliminated. 100,000 350,000 (75,000) 225,000 (46,000) 32,000 $790,000 $18,000 5,000 12,000 130,000 75,000 364,000 124,000 55,000 7,000 $790,000