Boca Inc. Balance Sheets December 3:1 Assets Cash Accounts Receivable Inventory Prepaid Expenses Long-term Investments Plant Assets 2020 2019 40,800 48,400 28,400 26,000 87,800 38,000 112,500 102,850 138,000 109,000 367,000 242,500 Accumulated depreciation Total (50,000) (52,000) 724,500 514,750 Liabilities and Stockholders' Equity Accounts Payable Accrued Expenses Payable Dividends Payable Bonds Payable Common Stock Retained Earnings Total 13,500 21,000 72,000 67,300 3,000 170,000 146,000 262,000 175,000 204,000 105,450 724,500 514,750 Additional Information: assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $7,500 cash. 2. A new plant asset was purchase 3. New bonds were issued at par for $36,000. 4. Net income was $154,480. 5. A $1,000 prior period adjustment was recorded in 2020 correcting an understatement of depreciation in 2015. The 2019 balance sheet is appropriately restated. 6. The increase in Long-term Investments was due to a purchase of investments. d directly in exchange for common stock valued at $42,000. Required 1. Prepa 1,339, 1,342, 1,345). Do not submit supporting computations. a 2020 statement of cash flows using the indirect method. Use the textbook format (pages re Tax Consultants has converted net income into net cash flow from operating activities, as explained earlier. The additional data indicate that it paid the dividend. Thus, the com- pany reports the dividend payment as a cash outflow, classified as a financing activity Statement of Cash Flows-2016 We are now ready to prepare the statement of cash flows. The statement starts with the operating activities section. Tax Consultants uses the indirect method to report net cash flow from operating activities Illustration 23-8 shows the statement of cash flows for Tax Consultants Inc., for year 1 (2016) TAX CONSULTANTS INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2016 ILLU State Tax C Year Cash flows from operating activities $34,000 Net income Adjustments to reconcile net income to net cash provided by operating activities: Increase in accounts receivable Increase in accounts payable $(36,000) 5,000 (31,000) 3,000 Net cash provided by operating activities Issuance of common stock Payment of cash dividends Net cash provided by financing activities Cash flows from financing activities 60,000 (14,000) 46,000 49,000 Net increase in cash Cash, January 1, 2016 Cash, December 31, 2016 $ 49,000 in