Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2020. a BRECKER INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2020 AND 2019 12/31/20 12/31/19 Cash $6,000 $7,000 Accounts receivable 62,000 51,000 35,000 18,000 40,000 60,000 4,000 Short-term debt investments (available-for-sale) Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets 130,000 5,000 154,000 (35,000) 46,000 (25,000) 50,000 $313,000 $295,000 $46,000 $40,000 4,000 8,000 6,000 4,000 8,000 10,000 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Retained earnings Total liabilities & stockholders' equity 60,000 100,000 69,000 100,000 30,000 57,000 30,000 36,000 $313,000 $295,000 BRECKER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2020 Sales revenue $338,150 Cost of goods sold 175,000 Gross profit 163,150 Operating expenses 120,000 Operating income 43,150 Interest expense $11,400 Gain on sale of equipment 2,000 9.400 Income before tax 33,750 Income tax expense 6,750 Net income $27.000 Additional information: 1. 2. Dividends in the amount of $6,000 were declared and paid during 2020. Depreciation expense and amortization expense are included in operating expenses. No unrealized gains or losses have occurred on the investments during the year. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2020. 3. 4. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) BRECKER INC. Statement of Cash Flows For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income $ 27,000 Adjustments to reconcile net income to Net Cash Provided by Operating Activities Depreciation Expense Amortization of Copyright Gain on Sale of Equipment Increase in Accounts Receivable Decrease in Inventories TITANAMA Increase in Prepaid Rent Increase in Accounts Payable Decrease in Income Taxes Payable Increase in Salaries and Wages Payable Cash Flows from Investing Activities Principal Payment on Short-term Loan Principal Payment on Long-term Loan Dividend Payments Net Cash Provided by Investing Activities : Cash Flows from Financing Activities Sale of Equipment III III IDO Purchase of Equipment Purchase of Investments Net Cash Provided by Financing Activities : Net Decrease in Cash Cash at Beginning of Period Cash at End of Period