Assume the following selected income statement and balance sheet information for Larriet Inc.:

Larriet Inc.

Larriet Inc. Income Statement

Balance Sheet Information Year Ended December $31,$ Year $5$

$(000\text{'}$s$)(000\text{'}$s$)$

December $31,$

$20232022$ Sales revenue $$385$

Cash $$40$ $$22$ Cost of goods sold $$224$

Accounts receivable $3439$ Other operating expenses $135$

Merchandise inventory $150146$ Depreciation expense $25$

Prepaid expenses $32$ Loss on sale of machinery $3(387)$

Machinery $125138$ Net loss $$2$

Accumulated depreciation $5542$

Accounts payable $2931$

Dividends payable $15$

Bonds payable $1538$

Common shares $208150$

Retained earnings $4481$

Additional information:

Machinery costing $$20$ thousand was sold for cash.

Machinery was purchased for cash.

The change in retained earnings was caused by the net loss and the declaration of dividends.

 

Required:

Reconstruct the journal entry regarding the sale of the machinery.

Reconstruct the entry regarding the purchase of machinery.

Reconstruct the entry regarding the declaration of dividends.

Reconstruct the entry regarding the payment of dividends.

Prepare the statement of cash flows using indirect method for the year ended December $31,$ Year $5.$