a. Compute the change in cash that occurred in 2019.

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

LO2 P13-3A. Statement of Cash Flows (Indirect Method) The Pruitt Company's income statement and com- parative balance sheets as of December 31 of 2019 and 2018 follow: $770,000 PRUITT COMPANY Income Statement For the Year Ended December 31, 2019 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 Assets Cash.... Accounts receivable Inventory...... Prepaid expenses. Plant assets Accumulated depreciation Goodwill Total assets $ 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 continued 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 $ 28,000 3,000 7,000 6,000 8,000 60,000 100,000 252,000 248,000 127,000 98,000 $480,000 $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. b. Prepare a statement of cash flows using the indirect method