Chapter 4 - Illustrative Problem #1 - Statement of Cash FlowsThe comparative balance sheets of a company are presented below:CashAccounts ReceivableCurrent YearPrior YearChangeInventory65,000$50,00015,00064,00078,000(14,000)Prepaid Advertising60,00042,00018,000Total Current Assets16,00020,000(4,000)Land205,000$190,00015,000Buildings100,000180,000(80,000)Accumulated Depreciation550,000480,00070,00050,000(300,000)(250,000)Total Long-term Assets$350,000$410,000(60,000)Total Assets555,000600,000(45,000)Accounts PayableTaxes Payable80,00020,000$68,00030,00012,000(10,000)Other Accrued Liabilities35,00040,000(5,000)Total Current Liabilities135,000138,000(3,000)Long-Term Bank Loan Payable75,000162,000(87,000)Total Liabilities210,000300,000(90,000)Common Stock150,000120,00030,000Retained Earnings195,000180,00015,000Total Stockholder's Equity345,000300,00045,000555,000600,000(45,000)Total Liabilities and Stockholder's EquityAdditional Information:Net Income:$35,000Buildings were sold during the year. Details related to the sold buildings include the following:Original cost:Book value at time of sale:Cash received from sale:$60,00040,000$15,000Also, new buildings were purchased during the year for cash.Land was sold during the year for:(No new land was purchased during the year.)$ 140,000A portion of the bank loan was repaid during the year.Dividends were declared and paid during the year. (Hint: Use your knowledge of the Retained Earnings equation to solve for the amount of the dividends.)Required: Prepare a statement of cash flows for the year-ended December 31st of the current year using theIndirect Method as illustrated in class.