Based on the following information, calculate the net income and prepare a statement of cash flows using the indirect method:

This problem contains partial balance sheet information for Madison Corporation. Compute the amount of net income, then determine the amounts that are to be reported for each item within each category of the balance sheet. Do not use headings or subtotals. Do not submit supporting computations.

For example, for operating activities, you would list depreciation and the amount, the increase (decrease) in receivables and the amount, etc. Similarly, you would have categories for investing activities and financing activities. Please remember to put negative amounts in brackets.

2020 2019

Debits

Accounts Receivable $96,000 $87,000

Inventory 53,000 48,000

Available for sale investments 22,000 35,000

Equipment 93,000 56,000

Patents 72,000 75,000

Credits

Allowance for doubtful accounts 6,400 8,500

Accumulated depr - equipment 28,000 26,000

Dividends payable 11,000 14,000

Long-term note payable 32,000 50,000

Common stock 130,000 100,000

Paid-in capital in excess of par 20,000 14,000

Retained earnings 98,000 54,000

Additional information related to 2020 are as follows:

1. Equipment that had cost $26,000 and was 70% depreciated at time of disposal was sold for $7,600.

2. A long-term note for $15,000 was issued for the acquisition of equipment.

3. Cash was paid for the acquisition of equipment.

4. Cash dividends of $8,000 were paid during the year.

5. A patent was purchased for $6,400.

6. Available for sale investments were sold at $5,200 above their cost.

7. Interest of $7,000 and income taxes of $32,000 were paid in cash.