Comparative balance sheet accounts of Bonita Inc. are presented below. Debit Accounts Cash BONITA INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 Accounts Receivable Inventory Equity investments Machinery Buildings Land December 31 2020 $42,300 70,000 30,300 22,000 29,900 67,000 7,600 2019 $33,700 60,400 24,100 38,700 18,900 56,100 7,600 $269,100 $239,500 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par Retained Earnings $2,200 5,600 13,300 35,000 3,400 21,000 150,000 38,600 $1,500 2,300 9,000 25,000 2,600 30,600 125,000 43,500 $269,100 $239,500 1. 2. 3. 4. 5. Net income for the year was $41,300. Cash dividends declared and paid during the year were $21,200. A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. Equity investments (level of ownership is less than 20%) that cost $25,200 were sold during the year for $28,900. No unrealized gains and losses were recorded on these investments in 2020. Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. Bonita's 2020 income statement follows (ignoring taxes). Sales revenue Less: Cost of goods sold Gross margin Less: Operating expenses (includes $8,350 depreciation and $5,076 bad debts) Income from operations Other: Gain on sale of investments Loss on sale of machinery Net income $3,700 (800) $534,300 376,200 158,100 119,700 38,400 2,900 $41,300 (a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities $ (b) 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).) BONITA INC. Statement of Cash Flows Adjustments to reconcile net income to > (Indirect Method) tA LA