Cash Accounts receivable, net Inventory Investment (long-term) Fixed assets Accumulated depreciation Total Assets 2019 2020 $34,000.00 $34,500.00 $12,000.00 $17,000.00 $16,000.00 $14,000.00 $6,000.00 $80,000.00 $93,000.00 $-48,000.00 $-39,000.00 $100,000.00 $119,500.00 Accounts Payable Bonds payable Common stock Retained Earnings Treasury Stock Total Liabilities and Equity $19,000.00 $12,000.00 $10,000.00 $30,000.00 $50,000.00 $61,000.00 $21,000.00 $28,000.00 $-11,500.00 $100,000.00 $119,500.00 Supplemental information for time period January 1, 2020 through December 31, 2020: Sales on account, $70,000. Purchases on account, $40,000. Depreciation, $5,000. Expenses paid in cash, $18,000 (including $4,000 of interest and $6,000 in taxes). Decrease in inventory, $2,000. Sales of fixed assets for $6,000 cash; cost $21,000 and two-thirds depreciated (loss or gain is included in income) Purchase of fixed assets for cash, $4,000. Acquisition of fixed assets by issue of bonds $30,000 (noncash activity) Sale of investments (long-term) for $9,000 cash. Purchase of treasury stock for cash, $11,500. Retire bonds payable by issuing common stock, i.e. conversion of bonds into common stock, $10,000 (noncash activity) Collections on accounts receivable, $65,000. Sold unissued common stock for cash, $1,000. 1. Prepare a statement of cash flows using the indirect method for the year ended December 31, 2020. (Hint: You first need to create an income statement based on the relevant supplemental information. Net income should be $7,000) 2. Prepare a side-by-side comparative statement contrasting net income items and cash flows from operations (direct method) and explain which of these two financial reports better reflects profitability